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Economy continues recovery despite trade chaos, but risks remain

South Australia’s economy is expected to strengthen in 2025/26, despite facing a difficult trading environment overseas. Final spending in the State has picked up and the labour market is strong. A rebound in the upcoming winter grain crop – driven by more favourable seasonal conditions – an easing of cost of living pressures and stronger growth in the Australian economy will support South Australia in the year ahead. 

However, there are two main risks to the economic outlook for South Australia: the potential for the United States to proceed with aggressive tariff increases which may provoke retaliatory measures from key trading partners, and the ongoing challenge of restoring stronger productivity growth across the Australian economy.

These findings are outlined in the latest Economic Briefing Report from the SA Centre for Economic Studies.

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