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Australia’s economy accelerates in Q4 but global risks cloud outlook

Trending:US-Isarel-Iran warT20 World CupWest Asia war falloutAir travel chaosHoli 2026Young Sherlock reviewadvertisementAustralia’s economy accelerates in Q4 but global risks cloud outlookFP Business Desk • March 4, 2026, 08:15:43 ISTWhatsapp Facebook TwitteradvertisementAnnual GDP growth hits 2.6 per cent as Q4 posts 0.8 per cent gain; inflation, cautious households, and geopolitical risks test the RBAAdvertisementSubscribe Join Us+ Follow us On GoogleAustralia’s economy accelerates in Q4 but global risks cloud outlook. Representational image/PixabayAustralia’s economy grew at its fastest annual pace in nearly three years during the fourth quarter of 2025, official data showed on Wednesday, highlighting a rebound in growth even as global risks and domestic inflationary pressures mount. The Australian Bureau of Statistics reported that real gross domestic product (GDP) expanded 0.8 per cent in Q4, up from a revised 0.5 per cent in the previous quarter, although slightly below analysts’ expectations of around 1 per cent. On an annual basis, GDP rose 2.6 per cent, the strongest pace since early 2023, when post-pandemic stimulus measures were still boosting the economy. STORY CONTINUES BELOW THIS ADWhile the growth numbers signal resilience, economists warned that the acceleration comes with challenges.“Stronger growth may seem positive, but it will be a concern for the Reserve Bank of Australia,” Stephen Smith, partner at Deloitte Access Economics, told Reuters.

Australia’s economy accelerates in Q4 but global risks cloud outlook. Representational image/Pixabay

Australia’s economy accelerates in Q4 but global risks cloud outlook. Representational image/Pixabay

Credit: Firstpost

Key Highlights

  • “The RBA views the economy as operating above its potential.
  • With inflation elevated, today’s data reinforces the likelihood of a rate hike in May.”More from Business Australia core inflation hits 16-month high, May rate hike odds jump to 80% Churchill statue defaced with ‘globalise the Intifada’ graffiti in London, police arrest suspectThe Reserve Bank of Australia (RBA) last month raised interest rates by a quarter-point to 3.85 per cent after three cuts in 2025, citing inflation pressures.
  • The bank has repeatedly indicated that the economy cannot sustain growth above 2 per cent without triggering further inflation. West Asia conflict adds pressureThe outlook is further complicated by geopolitical tensions in the Middle East.
  • Oil flows through the Strait of Hormuz have been disrupted, pushing crude prices up more than 10 per cent in recent weeks.
  • Although Australia is a net energy exporter, higher global oil prices act as a tax on both consumers and businesses. Financial markets reacted cautiously to the GDP report.
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Sources

  1. Australia’s economy accelerates in Q4 but global risks cloud outlook

This quick summary is automatically generated using AI based on reports from multiple news sources. The content has not been reviewed or verified by humans. For complete details, accuracy, and context, please refer to the original published articles.

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