abc.net.au

Australia's economy growing at fastest rate in almost three years

Gareth Hutchens

~2 minutes

BREAKING

16 minutes agoWed 4 Mar 2026 at 10:50am

Australia's economy has grown faster than expected. (AAP: Dan Peled)

Australia's economy was growing at an annual rate of 2.6 per cent in the December quarter, up from 2.1 per cent in the previous quarter.

It is the fastest rate of growth in almost three years, and much stronger than expected.

On a quarterly basis, the economy grew by 0.8 per cent in the December quarter, which was stronger than the 0.5 per cent recorded in the September quarter.

In the RBA's most recent forecasts released in February, the RBA said it was expecting the economy to be growing at an annual pace of 2.3 per cent by the end of last year, not 2.6 per cent.

The strong growth in economic activity coincided with inflation rising by more than anticipated towards the end of 2025.

It helps explain why the RBA was forced to raise interest rates in February to try to dampen economic activity and bring inflation back down.