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NAB sees Australian joblessness reaching 5.5% by early 2028
National Australia Bank (NAB) forecasts that Australia’s unemployment rate could rise to 5.5 per cent by early 2028 as economic growth remains below trend. The bank says higher interest rates aimed at tackling inflation are weighing on the economy, with the effects expected to build over the next two years.
NAB forecasts real GDP growth will slow from an annualised rate of about 2.9 per cent in the second half of 2025 to 1.4 per cent in 2026 and 1 per cent in 2027, before improving somewhat in 2028. It attributes the slowdown to 125 basis points of Reserve Bank of Australia cash rate increases since February 2026; the unemployment estimate is a forecast, not a reported outcome.
In short
- NAB forecasts unemployment could reach 5.5 per cent by early 2028.
- Australian growth is forecast to slow to 1 per cent in 2027.
- The bank links the outlook to higher interest rates and below-trend growth.
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The case for
NAB’s forecast suggests that sustained rate rises could slow demand enough to push unemployment higher, even as inflation is brought under control. Advocates of prioritising price stability may argue that accepting some near-term weakness is preferable to letting inflation persist and erode household purchasing power.
The case against
The forecast is uncertain, and slower growth does not make a rise to 5.5 per cent unemployment inevitable. Critics may argue that further rate increases risk imposing avoidable costs on workers and businesses, and that policymakers should weigh those costs against inflation risks and other ways to ease price pressures.
Explained simply
Australia’s unemployment rate measures the share of people who are looking for work but cannot find a job. It is affected by the pace of economic growth: when businesses face weaker demand, they may slow hiring or reduce staff.
The Reserve Bank of Australia sets the cash rate, which influences borrowing costs for households and businesses. It raises rates to help curb inflation, but higher repayments can also dampen spending and economic activity. NAB is one of Australia’s major banks, and its economic forecasts are estimates rather than official outcomes.
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Originally published by Daily Mail as “Grim prediction for Aussies as NAB forecasts sharp rise in unemployment rate”.