Australian Economic Outlook: Navigating the downturn

The Australian economy is enduring a policy-induced slowdown.  Entering 2024, both fiscal and monetary policy are at or close to the peak drag they will impose on the economy in this cycle. Still, with cost pressures proving to be persistent and elevated, the lingering inflation problem has not yet been cured.

We expect strong population growth will ensure that Australia stays out of recession. But policymakers will need to walk a fine line to ensure cost of living pressures do not overwhelm vulnerable households, inflation returns to target in a timely fashion, and the labour market remains close to capacity.

• What impact is strong population growth having on economic activity and inflation?
• How much of an impact will stage three tax cuts have on the economy?
• How long will we have to wait for interest rate cuts?