Less of a spike, more of a grind: Australian Forward View July 2026

24 July 2026

Economy and Markets

• We continue to forecast below trend growth this year and next and a gradual rise in the unemployment rate.
• The squeeze on households from high fuel prices was less acute in Q2 than earlier feared, which may mean near-term spending is a bit more resilient.
• But slower real income growth and the headwind from the housing market mean we continue to expect consumption growth of just 1.4% yoy over 2026 and 2027.
• Fuel prices fell steadily through Q2 but have reversed higher in recent weeks.

The Middle East conflict still points to elevated uncertainty, higher inflation, and slower growth, but now looks less like an acute spike and more like a rolling grind.

Read the full Australian Forward View Report - July 2026.