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2024 was a tough year for many Australian small businesses. Operating costs increased, interest rates remained unchanged and cost of living pressures dampened consumer spending.
But NAB’s chief economist Alan Oster is optimistic about the outlook for 2025. He cites the following probabilities for the year ahead.
* Inflation should be below 3% by the end of 2025, putting it within the RBA’s target range of 2-3%.
* There’s a strong chance the cash rate will drop by May, with a likelihood of further cuts by the end of 2025.
This should stimulate more consumer activity, giving small businesses a boost.
However, there are some global uncertainties that could inhibit business growth. For example, Donald Trump’s return to the presidency in the United States may mean higher tariffs imposed on Australian exporters.
Overall, though, Oster expects the Australian economy to strengthen during 2025. He encourages businesses to prepare for an uptick in consumer spending and put contingency plans in place for geopolitical influences.
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