Australia’s economy limps along, but the RBA should take a closer look before raising interest rates again | Greg Jericho
News Source
•Wed, 02 Sep 2026 15:00:29 GMT
📰 What Happened
Australia's GDP figures came out on Wednesday. The economy grew 0.4% in the June quarter. That was a tick higher than the previous quarter. It was also above the 0.3% that most economists expected.
Some headlines now predict an interest rate rise. The market immediately priced in a rate rise by November. But economist Greg Jericho says that reading is wrong. He says the difference between 0.3% and 0.4% is basically a rounding error.
He argues nothing in the GDP figures suggests the economy needs slowing. The story of this economy is one of give and take. What is good for investment is bad for trade.
🔍 The Backstory
The Reserve Bank watches GDP closely when it sets interest rates. It raises rates to cool an economy that is too hot. It cuts them to help a weak economy grow. These decisions affect mortgages, rents, and savings across the country.
Australia has faced tough international conditions lately. A global oil shock followed the attacks on Iran. Many feared a collapse, but growth has stayed positive. The RBA has already raised rates several times to fight inflation.
Jericho also warns about investment quality. Some projects, like datacentres, look good but send profit overseas. No one will build a cafe to serve a datacentre, he notes. He wants the RBA to look past the headline number before acting.
🎯 Why It Matters
Interest rate decisions affect your mortgage, rent, and savings. This debate shows why one small GDP number should not trigger a rate rise. It directly affects how much you pay each month.
Australia's GDP figures came out on Wednesday. The economy grew 0.4% in the June quarter. That was a tick higher than the previous quarter. It was also above the 0.3% that most economists expected.
Some headlines now predict an interest rate rise. The market immediately priced in a rate rise by November. But economist Greg Jericho says that reading is wrong. He says the difference between 0.3% and 0.4% is basically a rounding error.
He argues nothing in the GDP figures suggests the economy needs slowing. The story of this economy is one of give and take. What is good for investment is bad for trade.
The Reserve Bank watches GDP closely when it sets interest rates. It raises rates to cool an economy that is too hot. It cuts them to help a weak economy grow. These decisions affect mortgages, rents, and savings across the country.
Australia has faced tough international conditions lately. A global oil shock followed the attacks on Iran. Many feared a collapse, but growth has stayed positive. The RBA has already raised rates several times to fight inflation.
Jericho also warns about investment quality. Some projects, like datacentres, look good but send profit overseas. No one will build a cafe to serve a datacentre, he notes. He wants the RBA to look past the headline number before acting.
Interest rate decisions affect your mortgage, rent, and savings. This debate shows why one small GDP number should not trigger a rate rise. It directly affects how much you pay each month.