Jim Chalmers is putting a positive spin on the economy, but is Australia’s outlook grim?

Key points

• The economy slowed sharply in early 2026 and Australians’ living standards are once again going backwards.
• At the risk of upsetting the treasurer by “talking down the economy”, as he put it, there wasn’t all that much to love in the latest national accounts.
• And a lot of the bad news was papered over by the extraordinary rush to build datacentres.
• The economy was indeed running hot in the second half of 2025, which helps explain the pickup in inflationary pressures even before the US and Israel started bombing Iran in late February.
• That recent strength accentuates the slowdown in the latest figures.