Australian Key Themes in 2024: Growth to slow as policy bites

Australia’s economy outperformed expectations for much of 2023, boosted by a surge in population growth. With this dividend-to-growth set to wane, and policy settings curbing demand growth, the outlook for 2024 is weaker than 2023. We see three key themes as pivotal to next year’s outlook.

Population growth has been Australia’s best insurance against recession for some time. 2023 was no exception and 2024 is shaping up to be much the same. 

There is a large backlog of work across most segments in the construction sector. If build times normalise, there is an upside risk to our outlook. But cost inflation and insolvencies make us cautious on prospects for 2024.

Policy settings are likely at, or very close to their peak. There is a strong case for another rate hike, but the RBA may already be done for this cycle. Due to bracket creep, fiscal policy is exerting an unexpectedly large drag on household balance sheets. Some relief will come mid-year, but further easing may be warranted by the end of 2024. 

Talking points:

• How well is the economy absorbing the very fast growth in the population?
• Where are capacity constraints most binding in the construction sector?
• What are the key considerations for monetary policy in 2024? And is fiscal policy likely to become more supportive?

Sean Langcake

Head of Macroeconomic Forecasting, OE Australia

+61 2 8458 4236

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Sean Langcake

Head of Macroeconomic Forecasting, OE Australia

Sydney, Australia

Sean Langcake is Head of Macroeconomic Forecasting at Oxford Economics Australia where he is responsible for macro forecasting and analytical content. Sean is a regular contributor in the national media on Australian and global economic trends and policy issues.

Prior to joining Oxford Economics, Sean worked in a wide variety of roles at the Reserve Bank of Australia, largely focussing on forecasting and macroeconomic modelling. Sean holds a Masters Degree in Economics from the University of New South Wales, as well as a first class Honours degree in Economics and a Bachelor of International Studies from the University of Adelaide.

Ben Udy

Lead Economist, OE Australia

+61 2 8458 4293

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Ben Udy

Lead Economist, OE Australia

Sydney, Australia

Ben is a lead economist at Oxford Economics Australia working on the Australian Macroeconomic Service, and TradePrism. Prior to joining Oxford Economics ben has worked as a macroeconomic consultant in the private sector in Singapore and Australia and for the Treasury in New Zealand.