Is Australia's economy falling behind the rest of the rich world?

Updated 3 November 2026 with the latest figures.

For ten years, Christopher Hall soaked up rising costs at his raw honey business in Hervey Bay. This year his plastic containers cost nearly 40% more, and he has run out of room.

"We simply can't do that anymore," he told the ABC on 2 October. His honey buckets are going up to $16 a kilo.

Multiply that by a few million price tags and you get Australia's inflation problem. On 28 October the Australian Bureau of Statistics (ABS) said prices rose 4.3% in the year to September, up from 4.0% in August.

On 3 November, Melbourne Cup Day, the Reserve Bank of Australia (RBA) lifted the cash rate to 4.85%. That is its fifth rise this year and the highest rate in 18 years.

Treasurer Jim Chalmers says the pressure is global; Opposition Leader Angus Taylor says it is made at home. On 13 October the International Monetary Fund (IMF) forecast Australian prices rising 3.9% in 2026, against 3.1% across the rich world.

Partly. Australia's inflation sits near the top of the rich-country table, but its unemployment rate stays mid-pack and its headline growth looks ordinary. Confidence: Likely. Three parts to this: prices, jobs and growth per person.

The IMF tracks 41 advanced economies. On our count of its October data, Australia's forecast 3.9% inflation for 2026 ranks seventh highest (eighth if newly euro-joined Bulgaria counts). Among big English-speaking economies, only New Zealand, at 4.1%, is worse.

Oil explains part of it. Monthly fuel prices jumped 14.8% in August and another 9.4% in September, which the ABS puts down to "higher world oil prices". Brent crude traded above US$103 a barrel on 12 October and settled at US$104.77 on 2 November, the ABC reported.

But oil costs the same in Sydney and Toronto. The ABS's trimmed mean, which strips out the biggest price swings such as fuel, sat at 3.6% in September. That is above the RBA's 2% to 3% target band even without the petrol bowser.

The RBA said on 3 November that fuel costs now flow through to other goods and services, and that underlying inflation runs broad. It no longer expects inflation back at the top of its target band until late 2027.

Australia's unemployment rate rose to 4.7% in September, from 4.6% in August, the ABS said on 15 October. The number of people in work fell by 39,000 in the month.

That sounds bad until you look abroad. The IMF's rich-world average for 2027 is 4.6%, and it has Britain at 5.3%, Canada at 6.3% and New Zealand at 5.1%. Across the Tasman, unemployment already hit 5.6% in the June quarter, an 11-year high, Stats NZ says.

The worry is the slope. On the IMF's numbers, Australia's jobless rate climbs half a percentage point between 2025 and 2027. Only France rises faster among the 41 (Luxembourg matches Australia).

The RBA now sees it passing 5% by December 2028, Savings.com.au reported. In October, the bank's minutes said the trade-off between jobs and inflation "had deteriorated because of global cost pressures". In plain words: getting prices down now costs more jobs than it used to.

The IMF expects Australia's economy to grow 1.9% this year and 1.6% next year. That is a little below the rich-world average of 2.1% and 1.8%.

Now divide by people. Australia's population grows about 1.2% a year on IMF figures, faster than any other large rich country. On our maths, that leaves output per person growing about 0.4% in 2027.

That ranks fifth lowest of the 41. Japan grows only 0.7% a year, yet its shrinking population turns that into about 1.2% per person. Australia's per-person growth was 0.8% in 2025-26, the ABS says, so it roughly halves.

Jim Chalmers makes the strongest case that this is a world problem. "Australia's not immune from the same pressures," he told ABC Radio on 29 September, pointing to oil and rates rising worldwide. On 3 November he denied that government budgets drive inflation, the ABC reported.

He has a point. The IMF expects global inflation of 4.7% this year, and Australia's unemployment rate still beats Britain, Canada and New Zealand. The RBA itself notes "the Middle East conflict remains unresolved", which keeps oil supply tight.

But the gap with peers is the tell. Angus Taylor and Shadow Treasurer Tim Wilson blame government spending for the stubborn core. Governor Michele Bullock said the bank is "not tightening monetary policy because of the direct impact of oil prices".

These are forecasts, and the IMF assumes oil shipments through the Strait of Hormuz resume by March. If they don't, every country's inflation number moves, and Australia's ranking could too.

The next rate move is open. Three of the RBA's nine board members wanted to hold, and Bullock called it "probably a good point to just take stock for a minute". A sharp jump in unemployment would turn "mid-pack" into something worse.

Australia has a rich-world-sized inflation problem and a poor per-person growth record, but its jobs market still holds up better than most. Confidence: Likely. After the 3 November rise, borrowers and renters keep paying more, savers earn more, and job seekers face a slowly tougher market into 2027.

This piece draws on 19 sources: nine from the IMF, ABS and RBA (data, releases, a policy statement and the release calendar), eight news reports (five from the ABC, plus AAP, AP and 1News), one personal finance news site and one ministerial transcript. We ranked countries ourselves from the IMF's October 2026 data, using the 41 economies it classed as advanced before 2026, and calculated growth per person from the IMF's growth and population figures. We could not open the IMF's full report text, only its data. Researched with AI tools; checked and edited by VOID.

Australia's prices are rising faster than in most rich countries, and it isn't only petrol, which is why the Reserve Bank put rates up again on Melbourne Cup Day. Our unemployment rate is still about average for rich countries, even if it's heading the wrong way. The sneaky bit is that the economy only grows because there are more of us; per person, we're near the bottom.