OECD Warns of Sluggish Australian Economic Growth Amid Global Trade Concerns

The information on this website is general in nature and does not take into account your objectives, financial situation, or needs. Consider seeking personal advice from a licensed adviser before acting on any information.

Global economic growth is similarly anticipated to decelerate. OECD forecasts a reduction in growth from 3.2% in 2024 to 3.0% in 2026, attributing this trend to increased trade barriers among major economies and broader geopolitical tensions. The report specifically highlights that continued changes in trade policies, if maintained, could dampen global growth prospects and heighten inflationary pressures.

The potential slowdown has significant implications for both consumers and businesses within Australia. If growth rates dwindle, this could affect employment, wages, and investment levels across the country. Additionally, as higher trade barriers threaten global trade volumes, Australian exporters may face shrinking markets abroad, potentially putting additional pressure on domestic economic growth.

The report indicates that inflation, while expected to moderate gradually, could still surpass targets set by central banks, including the Reserve Bank of Australia. This poses a challenge for policymakers aiming to balance growth with inflation control. RBA Governor Michele Bullock emphasized the need to be vigilant against any resurgence of inflationary pressures in Australia.

: Experts suggest keeping a close eye on international trade developments, particularly the bilateral tariffs between major economies such as the US, Canada, and Mexico. If these tariffs were to be rolled back or applied more narrowly, it could lead to a more favourable growth and inflation outlook globally and in Australia.

The Reserve Bank of Australia has room to manoeuvre, given the current trajectory of moderating inflation. There’s potential for further interest rate reductions, which could stimulate domestic consumption and investment. Nevertheless, the caution remains as trade policy uncertainties continue to cast a long shadow over Australia’s economic future.

As policymakers navigate these challenging waters, strategic economic management will be crucial in cushioning Australia from external shocks and ensuring a steady growth trajectory amid a complex global landscape.

Published:Tuesday, 18th Mar 2025
Author: Paige Estritori

Please Note: We do not endorse any specific products or companies. Some content is sourced from third parties, including press releases, and may not be independently verified for accuracy or completeness.

Share this news item:

Finance News

Clear

RBA Holds Cash Rate at 4.35% Amid Economic Uncertainty

09 Jun 2026: Paige Estritori

The Reserve Bank of Australia (RBA) has decided to maintain the official cash rate at 4.35% during its June 2026 meeting. This decision comes amidst a backdrop of slowing economic growth and persistent inflationary pressures. - read more

APRA Evaluates 3% Serviceability Buffer Following Industry Consultation

09 Jun 2026: Paige Estritori

The Australian Prudential Regulation Authority (APRA) is currently reviewing the 3% serviceability buffer applied to mortgage lending, following a consultation period that concluded in early June 2026. This buffer requires lenders to assess borrowers' ability to repay loans at an interest rate 3% higher than the current rate, aiming to ensure financial resilience among borrowers. - read more

Liberty Financial Achieves Record SME and SMSF Lending Amid Residential Loan Decline

09 Jun 2026: Paige Estritori

Liberty Financial Group has reported record lending volumes in the Small and Medium-sized Enterprise (SME) and Self-Managed Super Fund (SMSF) sectors for the first half of the 2026 financial year. This achievement has helped offset a decline in the company's residential loan portfolio. - read more

Cochlear's Profit Warning Sends Ripples Through ASX 200

25 May 2026: Paige Estritori

The Australian stock market experienced a notable decline following Cochlear's announcement of a significant reduction in its profit guidance. The S&P/ASX 200 index closed 105.8 points lower, a 1.18% decrease, marking the largest single-day fall in over a month. Cochlear, a leading medical device company, slashed its FY26 earnings outlook by approximately 30%, citing challenges in key markets and increased competition. - read more

P&N Bank and Bank Australia Set to Merge

25 May 2026: Paige Estritori

P&N Bank has announced plans to merge with Bank Australia, aiming to establish a $30 billion mutual lender. This move comes less than six months after a previous merger attempt with Great Southern Bank was unsuccessful. The proposed merger is expected to enhance the combined entity's ability to offer competitive products and services to their members. - read more

Click for more Finance News