In the latest episode of The Astute Investor, LGT Wealth Management CIO Scott Haslem speaks with Stephen Halmarick, Principal and Chief Economist at Economics Unchained and former Chief Economist of the Commonwealth Bank of Australia, about the macro backdrop as we enter 2026.
Global economic outlook: 2025 delivered strong returns supported by resilient growth and rate cuts, but 2026 is expected to be more challenging as easing cycles end. Growth will be moderate globally, with the US outperforming Europe/UK and China slowing structurally.
Australian economy: Outlook is “not great, but not disastrous.” China’s slowdown and new iron ore supply weigh on demand, while domestic issues like weak productivity and rising regulatory burdens limit potential growth, now estimated at only 2–2.25% per year.
Monetary policy and inflation: After RBA cuts in 2025 supported real wages, inflation re‑accelerated, prompting a more cautious stance. The RBA is likely to spend 2026 debating whether to hold or slightly increase rates, with a preference for waiting for more data.
