EconomyAustralia edition
Australia GDP growth 1.35% in 2025: the slowdown that began in 2024
Australia's economy grew 1.35% in 2025, almost unchanged from 1.37% in 2024 and well below the 3.58% recorded in 2023. The break came in 2024, and unemployment has risen each year since, reaching 4.09% of the labour force in 2025.
The long view
- highest in 3 yrs
- 4.25% 2022
- lowest in 3 yrs
- 1.35% 2025
- 3-yr average
- 2.64%
- Readings below the latest figure
- 0%
Vernumo calculation
2024 was the year growth shifted down a gear
Australia's GDP grew 1.35% in 2025, according to the annual figures. GDP growth here means how much larger the economy's total output was than in the year before. The 2025 figure is almost identical to the 1.37% recorded in 2024, so the economy is still growing, but at a much slower pace than earlier in the decade. F4+1
The turning point sits in 2024. Growth dropped from 3.58% in 2023 to 1.37% that year, the sharpest fall since 2020, and 2025 did not bring a rebound. F2+2
Before the turn, growth was strong and joblessness was edging down
In 2022 the economy grew 4.25%, and in 2023 it still grew 3.58%. Over the same two years, the unemployment estimate slipped from 3.73% to 3.67% of the labour force, so a smaller share of people who wanted work were without it. F1+3
That pairing of solid growth and falling unemployment is the backdrop that makes the 2024 shift stand out. Both measures moved the other way once growth slowed. F2+3
Since the slowdown, unemployment has risen two years running
The unemployment estimate rose to 3.94% of the labour force in 2024 and to 4.09% in 2025. Those are two consecutive annual rises, following the small fall in 2023. F7+2
The timing lines up with the drop in growth, but the figures alone do not prove that one caused the other. They show that the slower years of 2024 and 2025 were also the years in which a larger share of the labour force was out of work. F3+3
For Australians, a slower economy and a larger share out of work
In plain terms, Australia's total output grew 1.35% in 2025, a smaller annual gain than in either 2022 or 2023. In the same year, 4.09% of the labour force was unemployed on this estimate, up from 3.67% in 2023. F4+2
These annual figures describe the economy as a whole. They do not show how incomes, hours worked or job openings changed, so they cannot say how the slowdown was shared across households or regions. F4+1
Annual estimates, and a monthly measure that is built differently
The unemployment figures used here are ILO modelled annual estimates that stop at 2025. The seasonally adjusted monthly rate of 4.72% for September 2026 comes from a different measure, so it should not be read as a continuation of the annual series. F8+1
AI analyst view
Little change expected low confidence 2026 annual figure
Estimate range: 1.0–1.8%
Why
- Momentum points to more of the same: growth has held near 1.35% to 1.37% for two years after the 2024 break, with no sign of a rebound in the annual series. F3 F4
- The labour market has loosened rather than tightened. Rising annual unemployment usually goes with softer household income growth, which tends to hold spending back rather than lift output. F7 F8
- Consumer prices were 4.3% higher in September 2026 than a year earlier. Inflation at that level erodes purchasing power, which works against a strong pick-up in real growth in 2026. C2
What would change this view
- If the annual unemployment estimate for 2026 falls back below 3.94%, pointing to a recovery in hiring
- If consumer price inflation drops well below 4.3%, easing pressure on real household spending
- If quarterly national accounts during 2026 show growth running closer to the 3.58% pace of 2023
This is the AI’s own interpretation of the official figures above, not an official forecast. It may turn out wrong.
Scenarios to watch
- Scenario, not a forecast If annual growth for 2026 stays close to the pace of 2024 and 2025, the slowdown would look less like a dip and more like a new, lower trend, and further rises in the annual unemployment estimate would be consistent with that.
- Scenario, not a forecast If growth picks back up towards the rates of 2022 and 2023, the 2024 turn would read as a temporary slowdown.
What to check next
- The 2026 annual GDP growth figure, to see whether the slower pace holds
- Whether the 2026 annual unemployment estimate rises for a third year
- Monthly labour force releases, read as their own series
Verified data used in this report
| Indicator | Value | Period | Sources | Accessed | |
|---|---|---|---|---|---|
| F1 | Australia · GDP growth | 4.25% | 2022 | World Bank | |
| F2 | Australia · GDP growth | 3.58% | 2023 | World Bank | |
| F3 | Australia · GDP growth | 1.37% | 2024 | World Bank | |
| F4 | Australia · GDP growth | 1.35% | 2025 | World Bank | |
| F5 | Australia · Unemployment rate | 3.73% | 2022 | World Bank | |
| F6 | Australia · Unemployment rate | 3.67% | 2023 | World Bank | |
| F7 | Australia · Unemployment rate | 3.94% | 2024 | World Bank | |
| F8 | Australia · Unemployment rate | 4.09% | 2025 | World Bank | |
| C2 | Australia · Consumer price inflation | 4.3% | Sept 2026 | Australian Bureau of Statistics | |
| C8 | Australia · Unemployment rate | 4.72% | Sept 2026 | Australian Bureau of Statistics |
Other background figures (18)
| Indicator | Value | Period | Sources | Accessed | |
|---|---|---|---|---|---|
| C3 | Australia · Electricity price inflation | 12.8% | Sept 2026 | Australian Bureau of Statistics | |
| C4 | Australia · Food price inflation | 3.2% | Sept 2026 | Australian Bureau of Statistics | |
| C5 | Australia · Fuel price inflation | 23.6% | Sept 2026 | Australian Bureau of Statistics | |
| C6 | Australia · Gas price inflation | 1% | Sept 2026 | Australian Bureau of Statistics | |
| C7 | Australia · Rent inflation | 3.6% | Sept 2026 | Australian Bureau of Statistics | |
| C10 | Australia · House prices | 10.3% | Q1 2026 | OECD | |
| C12 | Australia · Fertility rate | 1.48 | 2024 | World Bank | |
| C13 | Australia · Share of population aged 65+ | 18.09% | 2025 | World Bank | |
| C14 | Australia · Population growth | 1.53% | 2025 | World Bank | |
| R127 | Australia position among OECD member countries by house price growth over 12 months, counted from the highest (1 = highest in the OECD) | 8 | Q1 2026 | OECD | |
| R128 | number of OECD member countries with house price growth over 12 months data for this period | 35 | Q1 2026 | OECD | |
| R129 | Australia house price growth over 12 months, OECD comparison measure (OECD nominal house price index, 12-month change; can differ from the national release) | 10.3% | Q1 2026 | OECD | |
| R196 | Australia position among OECD member countries by total fertility rate (births per woman), counted from the highest (1 = highest in the OECD) | 10 | 2024 | World Bank | |
| R197 | number of OECD member countries with total fertility rate (births per woman) data for this period | 38 | 2024 | World Bank | |
| R198 | Australia total fertility rate (births per woman), OECD comparison measure (World Bank, total fertility rate; can differ from the national release) | 1.48 | 2024 | World Bank | |
| R259 | Australia position among OECD member countries by population growth, counted from the highest (1 = highest in the OECD) | 2 | 2025 | World Bank | |
| R260 | number of OECD member countries with population growth data for this period | 38 | 2025 | World Bank | |
| R261 | Australia population growth, OECD comparison measure (World Bank, population growth; can differ from the national release) | 1.53% | 2025 | World Bank |
Sources
How this report was checked
- Data: the newest reference period cited is Q1 2026.
- Figures were collected from the source on
- Written by an AI model (claude-opus-5-5) using only the official figures listed in this report.
- Automatic checks passed: every number matches a cited figure, every paragraph names its evidence, and there is no investment advice or copied source text.
- A separate quality-check model raised concerns, and the report was rewritten once to address them.
- No person reviewed this report before publication. Automatic checks confirm the numbers, not every interpretation.
Update history
- 2026-11-05 12:02 UTC — created
- 2026-11-05 12:02 UTC — approved+published
This analysis was written by AI from official statistics and passed automated checks. Last checked: 2026-11-05