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Forward Guidance

An economic cheat sheet for Australia in 2026

Growth is expected to hit cyclical peak this year, but economists are split on the future path of interest rates with the inflation battle set to continue.

Jennifer Duke
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Reserve Bank governor Michele Bullock faces an uncertain path forward with inflation. AAP Image/Dan Himbrechts.

Inflation took many by surprise in 2025 with fewer rate cuts than anticipated. What might 2026 have in store?

Here’s what you need to know about the key economic indicators as a new year begins.

Rates and GDP outlook for 2026

Rates: Economists are split between whether the Reserve Bank will keep rates on hold in 2026 or start to usher in early rises. Among the last to shift their expectations away from rate cuts last year was Westpac chief economist Luci Ellis, who previously tipped two cuts for 2026.

She now thinks there will be an extended hold over the full calendar year.