Commonwealth Bank of Australia stock faces slower growth outlook

Commonwealth Bank of Australia economists have cut their forecasts for Australian growth and employment, warning that households will carry much of the burden of a sharper and longer slowdown. The outlook, published by the CommBank newsroom on Monday, November 2, 2026, adds a more cautious economic backdrop for the bank and its customers.

CommBank now expects annual gross domestic product growth to slow to 1% by mid-2027, down from its previous forecast of 1.8%. Growth is not expected to return to its trend rate of about 2% until the second half of 2028, one year later than previously forecast.

Households face a longer squeeze

Household spending accounts for the largest part of the downgrade. CommBank expects annual spending growth to slow from 1.8% in the June quarter of 2026 to 0.7% by mid-2027 and remain subdued through next year. The bank said higher interest rates, persistent inflation and elevated energy costs are squeezing household budgets, with fuel spending leaving less room for other purchases.

Housing is already showing signs of the slowdown. CommBank said home prices across Australia's five capital cities had fallen 8% from their peak. A further rate increase would keep conditions soft, while continued investment in renewable energy and Australia's data-centre pipeline could provide some support for business spending.

Labour market risks increase

The bank also raised its unemployment forecast. The jobless rate is expected to rise from 4.7% to a peak of 5.1% at the end of 2027, compared with a previous peak forecast of 4.8%. CommBank expects unemployment to ease to 4.9% by the end of 2028, while annual wage growth is forecast to slow to 3% by the end of 2027.

The weaker outlook does not remove pressure on the Reserve Bank of Australia. Trimmed-mean inflation, the RBA's preferred measure of underlying price growth, stood at 3.7% in the September quarter. CommBank expects it to remain at or above 3% until early 2028, roughly six months longer than previously forecast.

CommBank expects the RBA to lift the cash rate to 4.85% at its November 2-3 meeting and then leave rates unchanged. The bank still sees two rate cuts in 2027, totalling 0.5 percentage points, but says the timing is uncertain. It also warns that the risk of further tightening in 2027 remains.

Stock context for investors

The revised outlook combines weaker household demand with a higher-for-longer interest-rate risk. For Commonwealth Bank, slower spending and a softer labour market could weigh on credit demand and asset quality, while elevated rates can support lending margins. The balance between those forces remains important for the stock as investors assess the effect of tighter policy on borrowers.

Commonwealth Bank of Australia stock traded at 103.56 euros on Lang & Schwarz at 09:13 CET on Monday, November 2, 2026.

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