Australians are struggling amid fluctuating interest rates.

Treasury Secretary Steven Kennedy delivered a stark economic warning during Senate estimates. He noted, “The contribution of household consumption to economic growth was the weakest it has been in the past decade outside of the pandemic.”

Kennedy added, “The recent weak retail trade data suggests consumption is expected to remain subdued into the first half of this calendar year as households continue to prioritize essential spending more broadly. We expect activity to be very weak in the March quarter GDP.”

This outlook from the Treasury Secretary highlights the Reserve Bank of Australia’s difficult position, balancing stubborn inflation against a deteriorating economy. Last week’s April CPI indicator was too high, likely frustrating the Reserve Bank. Meanwhile, the consumer economy is collapsing, with last week’s retail sales growth being the weakest in over three decades outside of the pandemic.