Deloitte Access Economics has cut Australia’s 2026-27 real GDP growth forecast to 1.3 per cent from 1.9 per cent.
For textile and apparel exporters, weaker consumer spending and confidence point to a tougher demand setting.
Inflation and higher rates are squeezing households, with essential prices rising faster than headline CPI.
The outlook is being pressured by rising interest rates, weak consumer and business confidence, stalled housing investment and a prolonged cost-of-living squeeze.
The report said that consumer spending is weakening as households adjust budgets, while business investment remains subdued outside data centre construction.
Deloitte reported, citing the June 2026 edition of Outlook, that headline consumer price index (CPI) may stay above 4 per cent for the rest of the calendar year, with underlying inflation edging higher as the oil shock moves through supply chains, peaking in early 2027 and returning to target in 2028.
The report also forecasts a 25-basis-point interest rate rise in August, followed by a 12-month pause before the Reserve Bank of Australia (RBA) eases policy late next year as inflation normalises. Deloitte Access Economics expects unemployment to average 4.9 per cent in 2026-27 and peak at 5 per cent across 2027-28.
Stephen Smith, partner and report author, Deloitte Access Economics said: “Australia’s growth outlook has deteriorated over the past six months. The economy is still expanding, but growth has slowed and the outlook has become more fragile.” Deloitte Access Economics now expects growth of 2.2 per cent in 2025-26, 1.3 per cent in 2026-27 and 1.9 per cent in 2027-28, down from earlier forecasts of 2.4 per cent, 1.9 per cent and 2.0 per cent, respectively.
Although oil prices have retreated to levels close to those seen before the Strait of Hormuz closure, the report said Australia is unlikely to gain momentum until households and businesses are more confident to spend and invest. For fashion retail and sourcing supply chains, the near-term signal is continued caution around Australian demand.
Fibre2Fashion News Desk
