The RBA cut the cash rate by 25 bps to 3.6% in August 2025, with the Board judging that further easing will likely be required to ensure inflation returns sustainably to target while maintaining full employment.

• Underlying inflation eased to 2.7% YoY in Q2 (Q1: 2.9%), with headline inflation at 2.1% YoY; near-term volatility is expected from electricity rebate unwinds, but the medium-term forecast remains ~2.5%.

• GDP growth is projected to pick up gradually, supported by private and public demand, though forecasts were revised slightly lower due to weaker productivity growth assumptions.

• Labour market conditions eased modestly, with unemployment rising to 4.3% and employment growth subdued, though participation rates and vacancies remain high.

• Financial conditions have loosened as earlier cuts lowered mortgage and business borrowing costs; housing activity and credit growth have begun to lift.

• Global risks remain tilted to the downside, particularly from US trade and fiscal policy, but downside scenarios have become less extreme; Chinese growth is expected to hold up with fiscal support.