Australia is enduring its most prolonged period of weak economic expansion since the early 1990s recession, according to a new assessment by Deloitte Access Economics.
The consultancy warns that structural headwinds, including persistent productivity stagnation and chronic underinvestment, are limiting the economy’s capacity to grow without reigniting inflationary pressures.
The diagnosis underscores the difficult policy environment facing the Reserve Bank of Australia (RBA).
With core inflation remaining the highest among major developed economies, the central bank is constrained in its ability to ease monetary policy.
The RBA recently lifted its cash rate to 4.35%, a move that aligned with market expectations but signals that the fight against price pressures is far from over.
This stagflationary dynamic presents a significant risk to market participants.