Reserve Bank of Australia raises GDP outlook to 1.8%

• The Reserve Bank of Australia upgraded its gross domestic product growth forecasts through 2028, driven by higher data centre investment.
• Business investment growth is now expected to reach 4.3% in December, marking a significant upward revision from prior expectations of 0.8%.
• Central bank officials noted that supply and demand across the wider economy are expected to return to balance by 2027.

The Reserve Bank of Australia upgraded its economic growth forecasts in its August statement on monetary policy due to a surge in data centre investments.

This revision contrasts with prior estimates, though overall growth remains projected below the long-term historical trend average of 2%.

Business investment surged to 6.5% in June, outpacing the 3.8% growth originally projected in the central bank's May statement.

Economic expansion is anticipated to reach 1.4% by December and climb to 1.8% by June 2028 as capacity pressures gradually ease.

The central bank operates as Australia's primary monetary authority, responsible for setting official interest rates to maintain economic stability.

Previous policy updates focused heavily on cooling persistent inflation pressures through a series of consecutive interest rate increases.