The global economy has demonstrated resilience amidst the complexities of post-pandemic monetary policy tightening and prevailing geopolitical strife impacting international commerce. This tenacity is evident in the persistent nature of disinflation across many regions. Central banks, to sustain economic expansion and employment progress, are cautiously easing monetary policies before fully anchoring inflation expectations.
Australian overview
The Australian economy staggered into 2024, edging close to recession with just 0.1 percent growth over the quarter.
- The Australian economy grew by a meagre 0.1 percent over the first quarter of 2024 and just 1.1 percent over the previous 12 months.
- Household consumption has grown by 0.4 percent during the quarter, slightly higher than what occurred in the December quarter 2023.
- Labour productivity, measured as GDP per hour worked, flatlined over the quarter and through the year as hours worked grew in line with GDP.
Global landscape
In some advanced economies, central banks have eased their policy amid slow growth. However, core services price inflation has remained sticky, causing the disinflation progress to stall.
- Inflation has dropped substantially in many advanced economies, but it remained above most central banks’ targets.
- The impact of monetary tightening and conflict factors means the world economy is unlikely to return to pre-pandemic economic growth trends in the near term.
- Since the costs of servicing debt have increased due to higher interest rates, the fiscal position of many governments in advanced economies have been under pressure.
Summary forecast
KPMG forecasts of key macroeconomic indicators
| Indicator | Jun-23 | Dec-23 | Jun-24 | Dec-24 | Jun-25 | Dec-25 | Jun-26 |
|---|---|---|---|---|---|---|---|
| GDP (Real) | 3.1% | 2.0% | 1.4% | 1.4% | 2.0% | 2.4% | 2.2% |
| Inflation* | 6.2% | 4.0% | 3.8% | 3.3% | 3.0% | 2.7% | 2.8% |
| Unemployment* | 3.6% | 3.7% | 4.2% | 4.3% | 4.5% | 4.6% | 4.7% |
| AUD/USD* | 0.66 | 0.65 | 0.67 | 0.69 | 0.70 | 0.71 | 0.73 |
Full details about the Australian economic conditions and forecasts can be found in KPMG's Australian Economic and Outlook: Q2 2024.
