Outlook for Australian softwood sales volumesFriday 6 Mar 2026 The latest headline CPI data showed inflation reaching 3.8% year-on-year in December 2025, prompting the Reserve Bank of Australia (RBA) to increase the cash rate from 3.6% to 3.85%. This development has implications for the outlook across multiple sectors of the economy, including manufacturing. In the RBA’s Statement of Monetary Policy released in November 2025 – when inflation for December was forecast at 3.3% – GDP growth was expected to increase around 2% before moderating in 2026 and recovering slightly in 2027.However, the higher-than-expected inflation outcome, exceeding projections by around 0.5 percentage points, has led to a reassessment of the economic outlook. The February 2026 Statement of Monetary Policy shows a significant revision to GDP growth projections. Strong spending from both private households and the Government is now expected to support slightly higher short-term growth, with GDP projected to rise from 2.0% to around 2.3% by December (with official data to be released by the ABS in early March). In the medium term, however, growth is forecast to slow, easing to approximately 1.8% by December 2026 and 1.6% by December 2027 (Figure 1).  Sources: ABS, RBA, FWPA analysis These projections are consistent with the revised inflation outlook, which indicates CPI will remain elevated until mid-2026 before gradually easing back into the RBA’s 2–3% target range. More >> Source: FWPA |
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