WestpacWeekly20260907

Week beginning 7 September 2026

AUSTRALIA & NEW ZEALAND WEEKLY Analysis and forecasts for this week’s key releases.

In this week’s edition: Economic Insight: The national accounts inkblot test. The Week That Was: Balancing risks to growth and inflation. Focus on New Zealand: RBNZ to pause in October, but hike in time for Christmas.

For the week ahead: Australia: RBA speak, Westpac-MI consumer sentiment, business survey, inflation expectations. New Zealand: Manufacturing PMI, Q2 business financial data. Japan: Current account balance, Q2 GDP (final estimate). China: CPI, PPI, trade balance, foreign reserves. Euro Area: ECB policy decision, Sentix investor confidence, Q2 GDP (final estimate). United Kingdom: Monthly GDP. United States: Labor day public holiday, CPI, PPI, UoM consumer sentiment, NFIB small business survey.

Information contained in this report current as at 4 September 2026.

Past performance is not a reliable indicator of future performance. The forecasts given above are predictive in character. Whilst every effort has been taken to ensure that the assumptions on which the forecasts are based are reasonable, the forecasts may be affected by incorrect assumptions or by known or unknown risks and uncertainties. The results ultimately achieved may differ substantially from these forecasts.

The national accounts inkblot test Luci Ellis Chief Economist, Westpac Group

• In something as complex as an economy, outcomes often to see. We pattern-match, we see creatures in the clouds – and defy simple narratives. It is a little like those inkblot sometimes, we can be selective with data when we should not psychology tests one sometimes sees. Is it a rabbit or is it a be, focusing only on what fits our narrative. lady? It depends on your perspective. I am not going to pretend to be above reproach on this front, • The national accounts for Q2 2026 were a case in point. being a member of the same narrative-seeking species as A hawkish take would focus on GDP growth being above everyone else. That said, I cannot help noticing how easy it RBA expectations and not below its view of trend; a dovish is to squint at the economic inkblot and see a hawk or a dove take would focus on the loss of momentum more recently. according to one’s prior beliefs. Likewise a hawk could point to the outsized July CPI print, while the dove can remind you of the noise and uncertain Those seeing the hawk will point to (among other things) the seasonality in the monthly data. Both narratives inherently 2.1%yr GDP growth being above the RBA’s forecast and not leave out contradicting signals. below its estimate of potential output growth “speed limit”, as the RBA is trying to engineer. They will note the tick-up in unit • The key issue here is to make sure that you are taking signal labour cost growth, resilient consumption, strong data centre from all the available data, not just the things that fit the investment and – beyond the national accounts – the outsized narrative. Labour market data deserve more consideration July CPI inflation data. Putting these together, a narrative than some observers are giving them. Also important is forms that seemingly demands immediate further tightening of remembering that the next quarter will always be thrown monetary policy. about by special factors, and what matters is where things are in a year or so’s time. In doing so, though, one would need to leave a few things out. Among these are the fact that growth stepped down • What is the resolution, if any? Structured analysis including noticeably through the year, and that about half the upside whole-economy models is one way through the difficulty, surprise in year-ended growth was a revision to an earlier but it relies on the models being a decent representation quarter, implying you got more growth for the same amount of of reality. Perhaps another, honouring the fact our brains inflation. Also downplayed in this narrative is the weak growth evolved to want simple stories, is to emulate Charles in average earnings per hour – a less-noisy input into unit Darwin and systematically note down any piece of evidence labour costs – the increase in household saving and the…