Australia’s latest inflation figures came in below expectations, easing pressure on the Reserve Bank ahead of its next rates decision. NAB Chief Economist Sally Auld discusses what the data means for interest rates and the inflation outlook.
“No one wins in a tariff war or a trade war”: NAB CEO on the economy - NAB
Feature image above: NAB Group CEO, Andrew Irvine
05 June 2025
Economy and Markets
Business conditions remain stable
During a visit to customers and colleagues in Newcastle this week, NAB Group CEO Andrew Irvine shared his outlook for the Australian economy amidst ongoing global uncertainty.
Newcastle: a growing market
Mr. Irvine said Newcastle’s business customers are thriving.
“It’s a market that is growing and has done well since COVID,” Mr Irvine said.
“The housing availability and affordability is quite good. You can drive around and see new homes being built.”
“The impact of all of that is businesses here are confident about the future which is terrific to see.”
NAB Group CEO Andrew Irvine and Senior Business Banking Manager Danielle O’Neill at a NAB branch in Newcastle.
Australian economy to achieve soft landing
Mr Irvine said he is also seeing emerging optimism and confidence being created on a national level.
“The first cut in the cycle that we got a few weeks back has certainly made a difference,” Mr Irvine said.
“You can see more strength in auction markets on weekends across the country and businesses tell me they’re doing well. They are continuing to want to invest and grow.
“I think we’re going to get that elusive soft landing everyone was talking about,” Mr Irvine said.
“We’re through the worst of it.”
Mr Irvine said the key driver was employment.
“I think that’s the biggest difference between this and any prior downturn,” Mr Irvine said.
“People have been hit with cost of living, but they haven’t been hit with unemployment. That’s quite a difference.”
“No one wins in a tariff war or a trade war”
Mr Irvine said while Australia has a very small direct exposure to the US from an export standpoint, tariffs will still have an impact on the economy.
“While we don’t sell a lot to the US, we do sell a lot to countries that sell a lot to the US,” Mr Irvine said.
“We sell significant raw materials to China, we sell a lot to near Asian markets. All these trade patterns are going to get disrupted.”
“The problem with a very aggressive tariff posture is that it creates inflation. It creates inflation in the US and it creates inflation globally because everyone else retaliates.”
Mr Irvine said the consequence to global interest rates is significant.
“I worry because tariffs are inflationary and disruptive,” Mr Irvine said.
“If global rates and inflation are more elevated than they otherwise would be, that will have implications for us [Australia]. We are not immune to that.”
“No one wins in a tariff war or a trade war.”
Despite these concerns, Mr Irvine said he feels Australia is well placed.
“We’ve diversified and we’re now better prepared with how we deal with finding new markets for our goods,” Mr Irvine said.
“We’re in better shape to deal with this than we would otherwise have been.”
CEO letter to NAB business customers
CEO Andrew Irvine has written to NAB business customers sharing his optimism for the year ahead.
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