Australia economy grows 2.3% amid low per-person productivity

Australia’s economy expanded by 2.3% during the 2025–26 financial year, an increase from the 1.6% growth recorded the previous year. However, economic output per person rose by only 0.8%, suggesting that much of the expansion is driven by population growth rather than productivity gains.

Data from the Australian Bureau of Statistics indicates that while the market sector grew by 2.5% and the non-market sector by 2.0%, the benefits to individual living standards remain limited. The household saving ratio increased to 6.1% from 5.5%, potentially reflecting consumer caution regarding financial security.

Economic pressures persist as the Consumer Price Index rose by 4.0% in the year leading to August 2026, and the unemployment rate reached 4.7% in September. Analysts note that Australia’s reliance on population growth to drive company profits, dividends, and property values may pose risks if immigration levels are reduced before productivity-driven growth is established.