The Australian Association of National Advertisers (AANA), Interactive Advertising Bureau (IAB) Australia and the Media Federation of Australia (MFA) last night convened Australia’s senior marketing leaders for the annual State of the Nation event – an in-depth discussion on the 2026 economic and political outlook and its implications for business performance and the marketing industry.
CEOs, CMOs and board directors from across the industry came together to hear from leading economist Stephen Koukoulas (past Chief Economist of Citibank and Senior Economic Advisor to a former Prime Minister of Australia), and The Australian Financial Review’s Economics Editor, John Kehoe (former Washington correspondent), who unpacked the current macroeconomic and political environment including the inflation trajectory, interest rate expectations, government spending, and the implications for consumer confidence and spending.
Koukoulas outlined an economy that is stabilising rather than stalling. After a low point in 2024, growth has regained momentum, inflation pressures may be temporary, and household spending has shown resilience despite subdued consumer confidence. While risks remain, particularly around fiscal tightening and productivity reform, the broader trajectory points to steady growth through 2026.
“Much of the inflationary pressure we saw in late 2025 was driven by one-off factors,” Koukoulas said. “As those unwind, we should see price pressures ease. That creates the possibility of interest rate stability in 2026, which provides important certainty for business. In this environment, strategic investment, particularly in brand and long-term positioning, becomes critical to drive growth.”
Kehoe doubled down, saying that “this year is crunch time for Australia’s economic leadership.”
“Inflation, interest rate rises and a deteriorating government budget will test our political leaders and the Reserve Bank. We are going to find out a lot about the Albanese government over the next three months approaching the May federal budget.”
Josh Faulks, CEO of AANA, welcomed the shift from caution to confidence.
“It was encouraging to hear Stephen and John reinforce that economic conditions will be favourable in 2026. When confidence returns, brands invest. And when brands invest in marketing, it drives growth. That momentum will be critical for Australian advertisers and the marketing ecosystem in 2026.”
Gai Le Roy, CEO of IAB Australia, highlighted growing confidence across platforms and media owners.
“It’s been a challenging year for parts of the market, particularly for media owners navigating uncertainty. What tonight reinforced is that some stability is returning to the economy. There’s cautious optimism, and that gives the industry confidence to keep innovating and investing in quality, effective media.”
Sophie Madden, CEO of the MFA, said the industry is at an inflection point.
“Periods of uncertainty put pressure on every part of the ecosystem, but they also sharpen focus. For media agencies, this is a pivotal moment. As the market stabilises, our role in helping brands navigate complexity, optimise investment and drive growth has never been more important.”
State of the Nation forms part of an ongoing collaboration between AANA, IAB and MFA to arm Australia’s marketing leaders with the insights they need to navigate and capitalise on a complex operating environment.