In the third quarter of 2025, Australia’s economy expanded by 0.4% quarter-on-quarter and posted an annual growth rate of 2.1%. Although the quarterly figure came in slightly below market expectations of around 0.7%, the annual result reflects the fastest pace of growth in the past two years—indicating that the recovery remains intact.
The main contributors to growth came from domestic demand, particularly private investment and household consumption, along with government spending. Business investment— including the development of data centers—provided significant support, signaling that the private sector is regaining momentum after a period of high interest rates.
However, several factors restrained overall expansion. Inventories declined, and net trade weighed on growth as imports rose faster than exports. This suggests that while domestic consumption and investment remain strong, external headwinds and stock management issues continue to affect the final outcome.
From the labor-market perspective, real wages remained stable, reflecting a relatively tight labor market that continues to support consumers’ purchasing power. Yet, with inflation and prices still elevated, these conditions also indicate that price pressures have not fully subsided.
Overall, Australia’s economy has entered a phase best described as “stable but cautious.” Growth remains positive and is driven by domestic demand and investment, but challenges persist from external trade dynamics and lingering inflationary pressure. Going forward, the sustainability of this expansion will depend heavily on how effectively the economy manages inflation, preserves purchasing power, and restores external sector performance.
The Reserve Bank of Australia (RBA) is likely to proceed cautiously with any easing cycle. The current RBA Cash Rate remains at 3.6%, unchanged for the past three meetings, suggesting that policymakers are still waiting for clearer signals before committing to further rate cuts.
*Weekly Chart AUDUSD
AUD/USD is currently trading around 0.6575, marking its highest level in the past two weeks. The pair is approaching a key weekly resistance zone near 0.6617. Meanwhile, the stochastic indicator continues to show a bullish crossover momentum at the 41.03 level. The upward range for AUD/USD remains open, with potential targets at 0.6617 and 0.6700 should bullish momentum persist.
Ade Yunus, ST WPA
Global Market Strategies