Australia into 2026: The Current Policy Environment

Australia enters 2026 having achieved a rare post-pandemic soft landing, which could be attributed to flexible macroeconomic policy framework and strong institutional credibility. Despite a highly restrictive monetary stance through 2022–2024, the economy avoided recession and maintained positive growth supported by robust population growth. Real GDP expanded by around 2.1% year-on-year to September 2025, with full-year growth estimated at approximately 1.8%, outperforming many advanced economy peers.