["Australian Economic Review, Volume 59, Issue 1, Page 5-15, March 2026. ", "\nABSTRACT\nThe Australian economy grew at a moderate pace in 2024–2025. Monetary policy gradually eased through 2025, with three rate cuts bringing the cash rate down to 3.6%. The labour market has softened further from its post‐pandemic state, but a resurgence of inflation in recent months places further monetary easing in doubt. Weak productivity growth remains a major domestic policy challenge. Geopolitical tensions, volatile tariff policies and the prospect of a stock market correction regarding the AI boom are downside risks heading into 2025/2026.\n"]