Australia’s economy grew 0.8% in the December quarter of 2025 in seasonally adjusted chain volume terms, according to data from the Australian Bureau of Statistics (ABS).
The result matched the pace recorded in the June quarter and marked a clear acceleration from the 0.5% expansion in the September quarter. Through the year, the economy expanded 2.6%, which marks a meaningful pickup from the sluggish 0.8% annual pace recorded at the end of 2023.
Key Takeaways from Australian GDP Report
- GDP rose 0.8% q/q in the December quarter 2025 in chain volume terms, up from 0.5% in Q3 2025. Annual growth came in at 2.6%.
- Nominal GDP rose 1.8% for the quarter, with the GDP implicit price deflator up 1.0%, reflecting firmer domestic prices and a modest improvement in the terms of trade (+0.4%).
- Private and public demand each contributed 0.3 percentage points to quarterly GDP growth, with domestic final demand adding 0.5 ppt in total.
- Household consumption grew 0.3%, led by discretionary categories including hotels, cafes and restaurants (+1.4%), furnishings and household equipment (+2.1%), and recreation and culture (+0.8%), boosted by Black Friday and Boxing Day promotional sales, major sporting events, and the school holiday period.
- Household saving ratio rose to 6.9% from 6.1% in the September quarter, as disposable income growth (+1.8%) outpaced nominal spending growth (+1.1%).
- 17 out of 19 industries recorded positive gross value added growth in the quarter, with Mining (+2.6%) and Agriculture (+2.5%) leading the goods sector.
- Net trade detracted 0.1 percentage points from growth, as a 1.8% rise in imports outpaced a 1.4% rise in exports.
The December quarter benefited from a confluence of factors: a strong agricultural harvest, elevated iron ore demand from China, a surge in domestic tourism tied to major sporting events and concerts, and a prolonged retail promotional period that extended from Black Friday well into Boxing Day.
Mining in particular rebounded from weather and maintenance disruptions in the prior quarter, with iron ore and coal production both picking up.
Link to official ABS Australian GDP (Q4 2025)
Domestically, the household picture was more nuanced. While spending grew at a modest 0.3% pace, the sharp rise in the saving ratio to 6.9% signals that households are rebuilding financial buffers rather than fully deploying income gains.
Construction remained the one soft spot among major sectors, contracting 0.5% in the quarter as site preparation and heavy civil engineering activity pulled back.
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Market Reactions
Australian Dollar vs. Major Currencies: 5-min
Overlay of AUD vs. Major Currencies Chart Faster with TradingView
The Australian dollar, which had already been grinding lower leading up to the GDP release, extended its slide even after the actual results came in better than expected.
AUD/JPY bore the brunt of the selling, declining roughly 0.55–0.65% from pre-release levels and continuing to drift lower throughout the session, at one point approaching a 0.65% loss. The Aussie saw more modest declines against GBP and CAD of around 0.20–0.30% in what appeared to be a “buy the rumor, sell the news” reaction.
The Australian currency continued to trade below post-GDP levels as the Asian session progressed, shrugging off mostly better than expected Chinese PMI data as risk-off flows from Middle East tensions remained broadly in play.
