Inflation continues to ease

GDP grew just 0.21% over Q2 2025, bringing the annual growth to 1.34%, which is well below the long term average of 3.3%

Household spending was one of the few positives. Both essentials and discretionary categories contributed to growth, suggesting the real wage gains are starting to lift confidence. Public investment, however, pulled back. Major projects across energy, transport, health and education have either wrapped up or hit delays, leading to a slowdown in government-led activity.

Inflation continues to ease. The CPI rose 0.7% over the quarter, lower than the revised 0.9% rise of the previous quarter. On an annual basis, inflation now sits at 2.1%, its lowest level since Q1 2021 and comfortably within the RBA’s 2-3% target range.