Australia & NZ Views: RBA Uncertainty, RBNZ Confidence

Research evidence excerpt

Australia & NZ Views: RBA Uncertainty, RBNZ Confidence

Goldman Sachs Australia & NZ Views

Exhibit 1: Oil prices have fallen much faster and by more Exhibit 2: ... easing some of the upside risk to inflation

than than expected

%yoy %yoy

US$/bbl US$/bbl 5 5

130 130 Headline CPI inflation

Brent crude oil futures

120 Front month contract 120 (dashed lines are prior forecast) GSe

4 4

110 RBA decision 110

100 100

RBNZ decision

3 3

90 Start of 90

conflict

80 80

US$/bbl 2 2

70 130 70

Brent crude oil

60 120 Front60 1 Australian headline CPI inflation 1

50 110 contra50 AustraliaNew Zealand

40 100 RBA40 d New Zealand

Jan-26 Feb-26 Mar-26 Apr-26 May-26 Jun-26 Jul-26 Aug-26 0 0

90 2024 2025 2026 2027

Source: Haver Analytics, Goldman Sachs Global Investment Research Source: StatsNZ, ABS, Goldman Sachs Global Investment Research

2. Australian economic momentum is slowing, with both GDP and consumption growth

(ex. utilities & tobacco) decelerating to a +0.3%qoq pace in 1Q2026 alongside rising

interest rates. We previously highlighted the risk that the slowdown evolves into

something less benign, but see several reasons why a manageable and orderly

adjustment remains the most likely scenario.

n The overall economy entered the slowdown with solid momentum, with GDP

expanding 2.5%yoy to 1Q2026 alongside firm and broad-based private demand

(Exhibit 3).

n Notwithstanding a weaker outlook for consumption, yesterday’s

stronger-than-expected household spending for May points to resilience (Exhibit 4)

and household balance sheets are strong.

Exhibit 3: Economic activity entered the slowdown with Exhibit 4: Monthly household spending has proved fairly

solid momentum resilient so far

%yoy %yoy %yoy %yoy

8 8 20 20

GDP growth with contributions

Nominal household spending