Outlook


The Northern Territory’s (NT) economic outlook explores a range of key economic indicators and industries, with forecasts produced for economic growth (gross state product and state final demand), population growth, employment growth, unemployment rate, prices (consumer price index) and wages (wage price index).

Gross state product | State final demand | Population | Employment growth | Unemployment rate | Consumer price index | Wage price index

The following is a summary of the NT's economic outlook, as published in the 2026-27 Budget.

Gross state product

  • The NT’s domestic economy grew by 2.9% in 2024-25, driven by household consumption and public consumption. However, economic growth was partly offset by higher imports and lower exports, with gross state product (GSP) increasing by 1%. The lower exports were the result of decreased exports from the Ichthys liquefied natural gas (LNG) plant due to unexpected maintenance in late 2024 (Chart 1).
  • In 2025-26, the NT’s GSP is forecast to increase by 2.7%, driven by an increase in exports as the Darwin LNG plant recommenced production in early 2026. However, the NT’s domestic state final demand (SFD) is expected to decline by 0.8% in 2025-26 due to a decline in private investment reflecting completion of Barossa-related construction. Household consumption is expected to contribute modestly to growth as higher borrowing costs temper discretionary demand following the February and March 2026 cash rate increases.
  • In 2026-27, NT’s GSP is forecast to growth by 5.8%, as the Ichthys and Darwin LNG plants operate at or near full capacity. As a result, exports will be the principal driver of growth, with services trade, for both exports and imports, expected to weaken as higher global oil prices raise the cost of air travel and freight, and heightened geopolitical uncertainty dampens consumer and business confidence. Together, these factors are expected to discourage overseas travel. Household consumption is forecast to decline as households feel the full effects of higher interest rates, elevated energy prices and stronger inflation, which will erode recent real income growth.
  • In 2027-28, export levels are forecast to stabilise and public investment is anticipated to ease from recent highs to more sustainable levels. By 2028-29, the NT’s GSP growth is expected to revert to trend.
  • The projections made in the economic outlook do not factor in potential or planned projects that are yet to reach final investment decision.

State final demand

  • SFD is forecast to decline by 0.8% in 2025-26 (Chart 1), following the completion of the Barossa project.
  • Household consumption is estimated to increase by 0.8% in 2025-26. Household consumption was supported by real wage growth in the first half of 2025-26 but cash rate increases by the RBA in early 2026 is impacting discretionary spending. In 2026‑27, high interest and fuel prices will continue to impact household consumption, which is expected to decline by 2.1%. Household consumption growth of 1.9% is forecast for 2027‑28, then will gradually return to long run averages.
  • Growth in public consumption is driven by ongoing demand pressures across frontline services such as health, justice and corrections, as well as revised timing of various programs. Public investment spending is currently elevated reflecting ongoing activity on large infrastructure projects with new infrastructure works in education and corrections commencing in 2026-27.
  • Private investment is estimated to contract by 15.8% in 2025-26 as the construction phase of the Barossa project to supply new gas to the Dawin LNG plant is completed. Private investment is expected to decline modestly in 2026-27 as private dwelling investment declines with higher interest rates and construction costs.
  • Private dwelling investment is expected to benefit from the HomeGrown Territory and FreshStart grants in 2025-26.

Population

  • The NT’s population is expected to grow by 1.2% in 2025-26 (Chart 2), driven by net overseas migration and natural increase. Growth is expected to ease to 1.1% in 2026-27 as overseas arrivals ease and natural increase eases remains subdued.
  • Over the forward estimates, population growth is forecast to reach 1.2% as migration flows normalise and natural increase recovers.

Employment

  • NT employment growth is expected to ease to 1.1% in 2025-26 and 0.6% in 2026-27, largely reflecting the completion of construction on the Barossa project, partly offset by maintenance works at the Ichthys LNG plant in mid-August to November 2025 and ongoing elevated public investment activity (Chart 3). Employment growth is forecast to stabilise at 1.6% by 2028-29.

Unemployment rate

  • The unemployment rate is expected to ease to 4.6% in 2025-26 before rising to 5.2% in 2026-27, reflecting weaker tourism activity, a decline in household consumption and weaker private investment. (Chart 4). Over the forward estimates period, the unemployment rate is forecast to ease gradually, stabilising at around 4.6% by 2028-29 as employment growth improves.

Consumer price index

  • In year-ended terms, growth in Darwin’s headline CPI is expected to be 5.2% in the June quarter 2026 and remain elevated at 3.2% in the June quarter 2027, before moderating to 1% in the June quarter 2028. Over the rest of the forward estimates, year-ended CPI growth is expected to return to 2.5% per annum, consistent with the midpoint of the RBA target band as wage growth stabilises, interest rates ease and demand returns to long-run levels.

    • The Middle East conflict has materially changed the outlook for inflation due to its impact on fuel prices. Oil prices are expected to remain elevated in 2026-27 and feed into production costs for a broad range of goods and services (Chart 5).

Wage price index

  • Territory wage growth is expected to moderate to 2.6% in 2025-26 before strengthening to 3.7% in 2026-27 (Chart 6). Across the forward estimates, wage growth is forecast to average 3.3% per annum.
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