Ausbil positive on economic growth

Mike Taylor

Managing Editor and Publisher

28 May 2026

Investment Manager Ausbil believes the outlook for Australian and US economic growth remains positive for 2026, despite the impacts of the US action in Iran.

In a commentary on the current investment environment, Ausbil Executive Chair and Chief Investment Officer, Paul Xiradis and Chief Economist, Jim Chronis said they believed that the US action in Iran, although extensive, is likely to be of a relatively short duration.

“Mitigating the risks is the fact that the US action in Iran is intended to be short and sharp, focused on reducing its perceived nuclear risks,” they said

“Despite the significant disruption in global energy, Ausbil’s outlook for Australian and US economic growth remains positive for 2026, and with some exceptions in oil-exposed sectors, the outlook for Australian earnings growth remains in the mid double digits for FY26 and FY27,” Xiradis and Chronis said.

“With the current oil supply shock, on Ausbil’s outlook, our ‘oil scenario’ GDP forecasts will see US growth lower at 2.1% (was 2.4%), Europe at 0.9% (was 1.4%), and China at 4.2% (was 4.5%).

“Australian growth slows with the front-loading of rate hikes to 2.3% (from our projection of 2.8%). Should oil remain elevated for 12 months, the Australian economy will slow further to 1.8% on our estimates.

“Ausbil sees global economic growth at +3.3% for 2026. This growth backdrop remains supportive of earnings growth,” their analysis said.

Looking at the outlook for earnings growth the pair noted earnings growth has been negative in the last three financial years due to a range of challenges. The outlook for FY26 and FY27 is for a return to positive growth.

“While the economy is expected to slow with the impact of higher oil, Ausbil’s outlook for +2.3% in growth for Australia remains supportive of equities, and most importantly, positive earnings growth,” they said.

“At the start of calendar 2026, on the back of a significant rerating in commodity prices in Q4 2025, and an even more promising outlook for growth, consensus has in-creased their FY26 EPSg to +13.7%, with Ausbil more positive again with an EPSg expectation of +15.2% for FY26 and +13.4% for FY27 (both for the S&P/ASX 200), largely on a better outlook for resources than the market .”