Australia's Economic Growth Slows More Than Expected in Early 2026

Australia's economic growth in the first quarter of 2026 slowed more than anticipated, as households reduced spending in response to rising fuel costs and interest rates. According to Jin10, government data released on Wednesday showed that the country's GDP grew by 0.3% in the first three months of the year, which is about one-third of the growth rate in the fourth quarter of 2025 and below expectations. The annual growth rate of 2.5% also fell short of forecasts. The head of national accounts at the Australian Bureau of Statistics noted that the March quarter saw a slowdown in economic growth, with moderate spending from both households and the public sector. The significant increase in interest rates and fuel costs in March may have created an environment of more cautious consumer behavior. Swap traders have reinforced the view that the likelihood of a rate hike at the August meeting is just over 50%, and they maintain the expectation that the Reserve Bank of Australia may raise rates once more before the end of the year.