A new global order as economic challenges persist | The Business

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2025 marked a new economic world order, marred by global shocks and trade wars. Fears of a US recession were replaced with stock markets hitting record highs. In April, Donald Trump's 'Liberation Day' tariffs on allies and enemies shredded the global trading system that had delivered economic growth for decades. Tensions between the world's big superpowers, the United States and China escalated before the Trump Administration hit pause and the TACO trade hit Wall Street.

Massive investments in artificial intelligence are driving global markets. Huge amounts of money continue to be invested in data centres, factories and technology.

Australia started 2025 in a cost-of-living crisis. The Reserve Bank had held interest rates steady at 4.35 Per cent for more than year, punishing Australians with large mortgages, as it tried to force down inflation. Consumer spending slumped. Then in February came the first of three rates cuts after 13 hikes. For a while, it looked like inflation had been tamed but consumer price rises accelerated in the year to October, above the RBA's target range, sparking calls for interest rate hikes in 2026.

Some of the nation's top economists spoke to business reporter Daniel Ziffer about the big economic issues of 2025 and what they think we can expect in 2026.
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