FEAR & GREED | Business News Interview: Why NAB's tipping three more rate cuts this year
Jun 4, 2025
Sally Auld, the Chief Economist at National Australia Bank, dives into Australia’s economic challenges and forecasts three rate cuts by year’s end. The discussion highlights a disappointing 0.2% growth, the impacts of vanishing electricity bill subsidies on household spending, and stagnant productivity rates. Auld also explains the concept of capital shallowening affecting productivity growth and how recent monetary policy shifts aim to balance inflation control with fostering economic growth.
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Subtrend Growth Expected in 2025
- Australia's economy is expected to grow below trend through 2025 with subdued momentum early in the year.
- Weather effects and electricity subsidy accounting distortions partially impacted the latest GDP figures.
Households Choose Saving Over Spending
- Household consumption rose modestly but underlying spending, excluding electricity subsidies, was very soft.
- Consumers appear cautious, focusing more on debt repayment and saving than spending.
Sluggish Business Investment Limits Growth
- Business investment remains sluggish, with public sector spending dipping and private sector growth tentative.
- The shift from public to private sector-driven growth is not yet clearly sustainable.