English – The Conversation | Australia’s economy slows as households tighten their belts, while AI investment surges by Stella Huangfu, Associate Professor, School of Economics, University of Sydney
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Australia’s economy grew only 0.3 % in the first quarter of 2026, a slowdown from the 0.9 % pace at the end of 2025, while GDP per‑person fell 0.1 %—a sign that households are not feeling richer despite overall growth. Higher fuel and fertiliser prices linked to the Middle‑East conflict, the end of government fuel discounts, and rising energy costs pushed households to spend more on essentials and cut back on discretionary items. The strongest area was private investment, especially in machinery, data‑centre infrastructure and artificial‑intelligence projects in New South Wales and Victoria, whereas net trade dragged growth – exports fell due to coal and iron‑ore disruptions while imports rose, partly from data‑processing equipment. Government spending fell and mining output declined after Cyclone Koji, while consumer‑facing services such as retail, accommodation, food, arts and recreation remained weak. The fall in per‑capita GDP raises the risk of a “per‑person recession” if the trend continues into the June quarter, and it signals that higher interest rates are already weighing on spending; consequently the Reserve Bank is expected to hold rates at its June meeting, balancing lingering inflation pressures against an increasingly split‑economy where digital‑tech sectors expand while many consumer sectors stay under strain.
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https://theconversation.com/australias-economy-slows-as-households-tighten-their-belts-while-ai-investment-surges-284423
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