Household spending remains cautious, with rising interest rates and higher fuel costs slowing down the Australian economy

Golden Ten Data reported on June 3 that Australia’s economic growth slowed more than expected last quarter as households cut spending in response to rising fuel costs and higher interest rates. Data released by the government on Wednesday showed that gross domestic product grew by 0.3% in the first three months of this year, below expectations and about one-third of the pace in the fourth quarter of 2025. The annual growth rate of 2.5% was also below forecasts. The head of National Accounts at the Australian Bureau of Statistics stated: “Economic growth slowed in the March quarter, with modest spending from households and the public sector. The significant increase in interest rates and fuel costs in March may have created an environment where consumers behave more cautiously.” Swap traders reaffirmed that the probability of a rate hike at the August meeting is only slightly above 50%, and they continue to expect that the Reserve Bank of Australia could raise rates once more before the end of the year.