Australia's unemployment rate could climb to 5.5 per cent by early 2028, while economic growth slows to just 1 per cent in 2027, according to grim new forecasts from National Australia Bank.
The sobering outlook was revealed in NAB's annual report, released on Thursday, with the bank warning that several years of below-trend economic growth would cause unemployment to rise gradually.
NAB forecasts Australia's economic growth will slow sharply over the next two years as the impact of higher interest rates flows through the economy.
'In Australia, economic growth is slowing, weighed down by 125 bps of RBA cash rate increases since February 2026 to tackle inflationary pressures,' the bank said.
The major lender expects real GDP growth to slow from around 2.9 per cent in the second half of 2025 to 1.4 per cent in 2026, before falling further to just 1 per cent in 2027.
'Real GDP growth is forecast to slow from an annualised level of around 2.9 per cent over 2H25 to 1.4 per cent over 2026 and 1.0 per cent over 2027, before some improvement during 2028,' NAB said.
More to come...
Australia's unemployment rate could climb to 5.5 per cent by early 2028 according to NAB
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