Australia's economic growth in the second quarter of 2026 was reported at 2.1% year-on-year, surpassing the 1.8% growth forecast by economists surveyed by Reuters. This growth follows a 2.5% increase in the previous quarter and reflects a quarter-on-quarter GDP rise of 0.4%, slightly above the anticipated 0.3%.
The growth was primarily fueled by private demand and mining exports, although household spending remained cautious, increasing only 0.4%. Factors such as the ongoing conflict in the Middle East have led households to reduce fuel consumption and limit travel due to higher prices.
The stronger-than-expected GDP figures provide the Reserve Bank of Australia (RBA) with more leeway to implement policy tightening measures aimed at controlling inflation, which was reported at 3.5% in July, exceeding the 3.3% forecast. The RBA anticipates that inflation will gradually decline, reaching the midpoint of its 2%-3% target range by late 2027