Australia’s Q1 2026 GDP growth of 0.3% signals cooling momentum, with CBA forecasting further deceleration by year-end.
Australia’s economy expanded 0.3% in Q1 2026, matching annual growth of 2.5%, driven by household spending and data centre investment. The result aligns with expectations but marks a slowdown from prior quarters as savings rates decline and housing weakens.
Commonwealth Bank of Australia (CBA) projects growth will ease to around 1.5% by year-end, citing softer household consumption and rising inflation risks from the Middle East conflict. Unit labour costs also moderated, with nominal growth at 3.2% and real growth at 0.6%, both below three-year averages.
Markets price no further rate hikes in June, with roughly 50% odds for August. RBA Governor Michele Bullock and senior officials face Senate scrutiny Thursday, their first public remarks since the May policy meeting.