Treasury’s economic forecasts have worsened again, for the second time in under six months.
From today’s MYEFO:
The Coalition’s nominal GDP forecasts have deteriorated significantly from the Labor government’s last pre-election economic update (PEFO) in August, from 3.75% in 2013-14 previously to 3.5% today.
Unemployment expectations have also worsened, with today’s MYEFO forecasting unemployment to remain at 6.25% throughout 2014-17, while the PEFO expected the figure to fall to 5% in 2015-17.
Here are Treasury’s forecasts from August’s PEFO:
“The Australian economy will continue to transition from resources-investment led growth to broader sources of growth over the forecast period,” Treasury explained today.
“However, the transition is now forecast to be slower than at the 2013 PEFO. While the fall in resources investment is expected to be sharper than previously forecast, the recovery in the non-resources sector is expected to be more gradual.”
And here is what Treasury forecast in the Budget in May: