Australia's economy grew by 0.3% in Q1 2026, significantly down from previous quarters, primarily supported by a surge in data center investments. Rising fuel costs and interest rates have strained households, prompting the Reserve Bank to consider further policy adjustments.

• 01Private investment increased by nearly 4%, driven by a 16% rise in spending on machinery and equipment, marking the largest gain in almost 30 years.
• 02Household spending rose by 0.5%, but inflation and higher energy costs have squeezed consumer budgets.
• 03The Reserve Bank of Australia raised the cash rate to 4.35%, reversing previous easing measures, with more hikes possible if inflation remains high.
• 04Mining production fell by 1.5%, negatively impacting GDP growth by 0.2 percentage points.
• 05The household savings ratio declined to 6.2%, indicating reduced financial resilience among consumers.

The economic slowdown is affecting household budgets and investment levels, with rising costs leading to tighter financial conditions for consumers.