Economic outlook

More about the NSW economy

    Economic performance

    • Inflation has continued to ease over the past year with softening activity and a gradual rise in the unemployment rate, though elevated services inflation is delaying the easing in overall inflation.
    • Cost-of-living pressures have weighed on household spending and slowed growth in the New South Wales domestic economy.
    • Public demand is providing some offset, while strong population growth is supporting business investment and continued employment growth.
    • The slowdown in economic activity is expected to continue in the short term, driving a relatively modest lift in the unemployment rate and a further easing in inflation.
    • Momentum in activity is anticipated to recover in 2024-25 as cost-of-living pressures ease.
    • Overall, the outlook is consistent with a soft landing for the economy.
    • The risks to the outlook centre primarily on geopolitical risks and uncertainty around the path for global inflation and interest rates. 

    A more detailed economic outlook can be found in Chapter 2 of the 2024-25 NSW Budget Paper No.01.

    New South Wales economic performance and outlook (a)

     

    2022-23

    2023-24

    2024-25

    2025-26

    2026-27

    2027-28
      Outcome Forecast Forecast Forecast Forecast Forecast

    Real state final demand(b)

    4.8

    1 (1½) 

    1¼ (1½)

    2¼ (2)

    		 2½ (2¾) 2½

    Real gross state product

    3.7

    1½

    2 (1¼)

    2

    		 2¼ (2½) 2¼

    Employment

    6

    2½ (1½)

    1 (½)

    1

    		 1½ 1½

    Unemployment rate(c)

    3.2

    4 (3¾)

    4½

    4½

    		 4¼ 4

    Sydney consumer price index

    7.1

    4¼ (4½)

    3 (3¼)

    2¾

    		 2½ 2½

    Wage price index

    3.3

    4

    3¾

    3½ (3¼)

    		 3¼ 3½

    Nominal gross state product

    10.0

    5 (3¾)

    5¾ (3)

    4¾ (4)

    		 4½ (5¼) 4¼

    Population(d)

    2.2

    2.1 (1.7)

    1.2 (1.3)

    1.2 (1.3)

    		 1.1 (1.2) 1.1

    (a) Forecasts are rounded to the nearest quarter point and are annual average per cent change, unless otherwise indicated. 2023-24 Half-Yearly Review forecasts in parentheses where different. 
    (b) Forecasts completed prior to publication of the March quarter 2024 National Accounts by the Australian Bureau of Statistics (ABS).
    (c) June quarter, per cent.
    (d) Per cent change through the year to 30 June. Forecasts rounded to nearest 0.1 percentage point. 

    Note: Commodity prices are assumed to follow Consensus Economics forecasts as of April 2024. Broadly consistent with market expectations, the RBA cash rate is assumed to decline from early 2025 and steadily move back toward a more neutral setting within the forward estimates. The Australian dollar trade-weighted index is assumed to average 65.1 across the forecast period. 

     

    Source: Australian Bureau of Statistics (ABS) and NSW Treasury

    Last updated: 19/06/2024