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From Australian Fertility Rate Reverses Decline, Driven by Regional Births

How could the turnaround in Australia's fertility rate affect KPMG?

Possible What happens if… A possibility worth considering, not a forecast.

KPMG's long-term economic forecasts may shift due to changing fertility trends The turnaround in Australia's fertility rate, which saw a 2.6 per cent lift in births in 2025, represents a significant demographic shift that influences long-term economic planning. KPMG urban economist Terry Rawnsley attributed this modest 'baby bounce' to improvements in economic circumstances, such as softening interest rates and easing cost of living pressures. However, Rawnsley also noted that rising inflation, currently at 4.3 per cent, and subsequent rate hikes by the Reserve Bank of Australia could put downward pressure on birth numbers again, suggesting that future demographic trends will be heavily tied to economic stability. This requires advisory firms like KPMG to adjust their projections for labor supply and consumer spending.

Reported by 1 independent outlet Written 11 hours ago
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How it reaches KPMG

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The facts so far

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  • There were 299,903 births registered in 2025, a 2.6 per cent lift on the previous year, according to the Australian Bureau of Statistics.smh.com.au
  • The fertility rate lifted marginally to 1.497 after dropping to a record low in 2024.smh.com.au
  • KPMG urban economist Terry Rawnsley attributed the 'baby bounce' to improvements in the economic circumstances of families.smh.com.au
  • Inflation has climbed to 4.3 per cent, prompting the Reserve Bank to lift official rates five times this year.smh.com.au

Why it matters

Demographic shifts, such as changes in fertility rates, are fundamental inputs for large advisory firms like KPMG. These firms rely on accurate long-term projections regarding population size, labor force participation, and consumer demand to advise businesses on investment, workforce planning, and market entry strategies. A sustained change in fertility rates signals a shift in the future structure of the Australian economy, requiring a recalibration of these core forecasts.

This demographic trend is occurring against a backdrop of significant economic uncertainty. The reports highlight that while regional areas are seeing a modest baby boom, capital cities are experiencing sharp declines, and rising cost of living pressures are predicted to put downward pressure on birth numbers again. This dual trend—regional growth versus urban decline, coupled with economic volatility—complicates the forecasting challenge for advisory services.

What we don't know yet

  • Will the current high inflation and rising interest rates continue to suppress birth numbers?
  • How will the differential fertility rates between regional and capital cities affect labor market projections?

What would change this answer

The Reserve Bank of Australia begins to soften its interest rate hikesThis could increase household confidence, potentially leading to a more sustained increase in birth numbers and stabilizing long-term demographic forecasts.
Inflation continues to climb above 4.3 per centThis would likely reinforce the prediction that rising cost of living pressures will put further downward pressure on birth numbers, leading to more pessimistic long-term forecasts.

Who else could feel it

Other possible ripples from the same event.

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The full eventAustralian Fertility Rate Reverses Decline, Driven by Regional Births Everything aboutKPMG

Brind's analysis is written by AI from the reporting linked above and can be wrong. This explainer is a possibility worth considering, not a forecast: steps marked as Brind's reasoning are not stated in the reporting. It is not investment advice; do your own research.