Deloitte has cut its economic growth forecasts for Australia again, just as consumer confidence has fallen to its lowest level in three decades after the latest interest rate rise.
The Downgrade
This isn't the firm's first reduction. The Australian's headline put it bluntly: Deloitte was calling time on the country's “golden era.”
Confidence Hits a Thirty-Year Low
Households have noticed. Consumer confidence has fallen to its weakest reading in three decades, following the latest rate rise. Borrowers feel the squeeze and pull back. That caution feeds directly into growth figures forecasters are now marking down.
Why This Matters:
A second downward revision from a forecaster, alongside a thirty-year low in consumer confidence, suggests pressure on Australian households is real and measurable. From a fiscal and market perspective, higher borrowing costs and weaker sentiment are the key dynamic to watch: when confidence erodes, spending slows, and slower spending drags on business investment and employment. Policymakers face the familiar trade-off between taming inflation and protecting growth. The source material doesn't detail the size of the downgrade or the government's response, so the full scale of the damage—and what Canberra and the central bank intend to do about it—remains to be seen.