Australia’s economy likely to slow until stage-three tax cuts, lower interest rates and easing inflation kick in, CBA says

Household spending rose 3.1% in January, reversing most of December’s 3.5% slide, but the pickup may prove short-lived, Commonwealth Bank says. Photograph: Jono Searle/AAP

Australia’s economy is likely to slow until about the middle of 2024 until a combination of tax cuts, interest rate cuts and easing inflation begin to lift spending, according to Commonwealth Bank’s chief economist.

The CommBank Household Spending Insights index rose 3.1% in January, reversing most of December’s 3.5% slide, with the rebound led by a 13.5% rise in travel and recreation spending for the month, thanks in large part to record crowds at the Australian Open in Melbourne. Household goods spending was also up 10.5%.