Australia’s GDP growth beats forecasts

Despite the positive data, we have an economy with a weak private sector, a concerned household sector and a government sector that is crowding out the business sector, writes KPMG Australia Chief Economist Brendan Rynne.

Australia's latest gross domestic product (GDP) data contained some welcome news, with the economy growing by 0.8 percent in the December quarter, faster than expected. This translates to 2.6 percent annual growth for 2025, which is somewhere close to trend. GDP per capita also increased by 0.4 percent over the quarter to end up 0.9 percent higher for the year. However, a closer look under the hood suggests that this cannot be sustained. Growth was supported by a build-up in inventories (...

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Authors: Brendan Rynne

Published Date: 05 March 2026