Growth
Australia’s economy is projected to grow slowly, with rates of 2.25% in 2025-26 and 2.5% in 2026-27. The economic impact of Ex-Tropical Cyclone Alfred is expected to reduce GDP by up to 0.25%.

Budget Deficit
The underlying cash balance is forecast to be a deficit of -$42.1bn in 2025-26, with the deficit expected to continue for several years. Debt is expected to rise from 18.4% of GDP in 2023-24 to 21.5% in 2025-26, reaching 23.1% by 2028-29.

Employment
Unemployment remains low, with a high participation rate. Over one million jobs have been added since May 2022, with 80% of these in the private sector. Unemployment is expected to peak at 4.25%.

Wages
Real wages have grown for five consecutive quarters, with a forecast increase of 0.5% in 2024-25. The Wage Price Index (WPI) grew by 3.2% through the year to December 2024 and is expected to grow by 3% to June 2025 and 3.25% to June 2026.

Inflation
Inflation is expected to reach 2.5% by June 2025. Cost of living relief, along with declining petrol prices and electricity rebates, helped reduce inflation by 0.75% in the year to December 2024.