23 March 2026

Too many shocks too little slack

  • The economy ended 2025 in a strong position though activity indicators in 2026 have been a little more mixed.
  • Inflation and capacity pressures remain evident, and the RBA will need to see activity slow to build comfort on inflation.
  • We see the RBA increasing rates again in May, taking the cash rate to a peak of 4.35% and remaining on hold until mid-2027.

Uncertainty remains extremely elevated, with the supply disruption in the Middle East adding sharply to near term inflation and creating risks to both inflation and growth.

Read the full report: Forward View Australia: March 2026 (PDF, 1MB).

Topics

Economic & Market news

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