Jun 3, 2026 – 12.02pmAustralia’s economy was already slowing in the first three months of the year as the early economic fallout from the Middle East war and interest rate increases hit, and economists now warn a housing downturn risks dragging growth even lower.The quarterly rate of economic growth fell to 0.3 per cent in the March quarter from 0.9 per cent in December, Australian Bureau of Statistics data released on Wednesday show. This was weaker than the 0.5 per cent growth expected by economists.Subscribe to gift this articleGift 5 articles to anyone you choose each month when you subscribe.Subscribe nowAlready a subscriber? Fetching latest articles
Economic growth slows to 2.5pc as rates start to bite
New data released by the ABS showed Australia’s economy was already slowing before being hit by the fallout from the Middle East war and interest rate increases.
TL;DRAI
Australia's Q1 growth slowed to 0.3% from 0.9%, missing the 0.5% forecast, as Middle East tensions and interest rate hikes bite. Housing sector contraction threatens further slowdown; IT budgets will tighten and digital transformation investments face delay across Asia-Pacific.
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