Economic growth slows to 0.3% in first quarter of 2026
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The news: Australia’s GDP grew 0.3% in the first quarter of the year, the softest growth since the beginning of 2025.
The context: The data, released by the Australian Bureau of Statistics (ABS) on Wednesday, also showed that annual GDP growth had fallen from 2.6% to 2.5%.
The numbers demonstrate that Australia’s economy was slowing slightly before the Middle East War erupted in February.
The numbers matched expectations from Westpac, which predicted 0.3% growth for the quarter, but was below ANZ’s expectations of 0.5%. Commonwealth Bank had predicted a flat outcome.
Productivity, a key focus of the Albanese government, also dropped by 0.6% in the first quarter, well below a 0.7% growth in the second quarter of last year. Productivity did not drop into negative territory throughout 2025.
Real net disposal income grew 0.4%, slight above the second half of last year but well below the 1% growth seen in the second quarter of 2025.
Growth in the second quarter of 2026 could also be weaker, as the impact of a third successive interest rate hike flows through to the economy.
What they said: “Modest growth reflects subdued household and government consumption, and adverse weather impacts that hampered mining production and exports,” the ABS release said.
“Business investment in data centre machinery and equipment was the largest contributor to growth.”
The source: Australian Bureau of Statistics
