Economic optimism

In 2025, the world faces a highly uncertain economic environment, in large part due to US President Donald Trump’s erratic tariff announcements and reactions from major economies.

At time of fieldwork, President Trump had announced plans for 25% tariffs on steel and aluminium imports to the United States, including from Australia. He had also announced or threatened tariffs against China, Canada, Mexico, and several other countries. He had not yet announced his 2 April ‘Liberation Day’ tranche of tariffs on countries around the world, and tariffs between the United States and China had not yet escalated to their peak.

Combined with ongoing cost-of-living pressures impacting many households domestically, Australians’ sense of economic optimism has now fallen to its lowest point in the Lowy Institute Poll’s two-decade history.

Only half of Australians (52%) say they feel any level of optimism about Australia’s economic performance over the next five years, equalling a Covid-era low in 2020. Almost no one (2%) says they feel ‘very optimistic’ about the economy. By contrast, almost half of the public (47%) say they feel ‘pessimistic’ (40%) or ‘very pessimistic’ (7%) about the economy.

Those in the 18–29 year age group feel least optimistic about the economy (43%), about ten points lower than levels of optimism in every other age bracket. Australians who lean towards the Labor Party (66%) report higher levels of economic optimism than those leaning towards the Coalition (52%) or the Greens (46%).