Australia Recession Risk 2026: Why the Odds are Rising

Summary

• Australia recession risk has clearly risen, but the economy is not currently in a technical recession. Australia's GDP grew 0.8% in the December quarter of 2025 and over 2.6% over the year, while GDP per capita also rose in the quarter.
• The real problem is the mix: inflation is still too high, the cash rate is at 4.1%, fuel prices are acting like an extra tax on households, and confidence has fallen hard. The RBA expects headline inflation to reach 4. . .