Australian economy grew 0.4% in the June quarter

Australian gross domestic product (GDP) rose 0.4 per cent in the June quarter 2026 and 2.1 per cent compared to June quarter 2025 (seasonally adjusted, chain volume measure), according to figures released today by the Australian Bureau of Statistics (ABS).

Grace Kim, ABS head of National Accounts, said: "Economic growth remained subdued in the June quarter as households continued to behave cautiously. While increased spending and business investment occurred in pockets of the economy, imports supported much of the growth, moderating its contribution to overall GDP growth".

Household consumption rose 0.4 per cent in the June quarter with subdued spending across most categories. The Middle East conflict influenced spending behaviour with falls in fuel consumption in response to elevated prices, and reduced domestic and international travel. 

Purchase of vehicles rose by 10.3 per cent as households continued to transition to electric vehicles. "The rise in electric vehicle purchases may have reflected households taking a longer-term approach to cost of living pressures, with some choosing EVs to help reduce ongoing expenses," Ms Kim said. 

Private business investment declined 0.5 per cent. Investment in machinery and equipment for data centre fit outs fell following a substantial rise in the March quarter. Investment in data centres remains at elevated levels. Increased purchases of planes and industrial transport equipment partly offset the quarterly fall. Private business investment was 10.4 per cent higher than June quarter 2025. 

Imports of goods rose 2.4 per cent driven by cars and planes. In contrast, imports of services fell 4.9 per cent as the Middle East conflict disrupted Australians’ international travel plans.

"The number of Australians travelling overseas for the northern hemisphere summer fell for the first time since the COVID-19 pandemic, significantly reducing international travel expenditure," Ms Kim said. 

Exports rose 0.8 per cent driven by coal reflecting higher production, following weather disruptions in the March quarter. The rise in exports outpaced the rise in imports (up 0.5 percent). Net trade contributed 0.1 percentage points to GDP growth.

Compensation of employees increased by 1.5 per cent reflecting continued competition for skilled labour, increased wages, as well as bonuses and redundancies paid in the quarter. The household saving to income ratio remained stable, up from 6.4 to 6.5 per cent.

This release includes the first estimates of economic growth for the 2025-26 financial year. On an annual basis, GDP rose 2.4 per cent, while GDP per capita increased by 0.8 per cent. "Annual growth outpaced the previous two years with stronger growth from service industries which account for over 70 per cent of economic activity in the Australian economy," Ms Kim said.