Australia's Budget Deficit Is Still At $30 Billion After Treasury Released Its Economic Statement

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  • The deficit remains the same at $30.1 billion for 2013/14
  • A $24 billion deficit has been forecast for 2014/15
  • The economy is tipped to grow 2.5% in 2013/14, and 3% in 2014/15
  • $4.2 billion surplus in 2016/17
  • “There’s no new news there if you like,” Rob Henderson, chief markets economist at National Australia Bank told Sky News after the release. “There’s no market reaction.”

    terms of trade are also expected to decline by around 5.75% in 2014/14, and by 3.75% in 2014/15. Here’s what treasury said in its statement:

    The terms of trade are expected to decline by 5¾ per cent in 2013-14 and 3¾ per cent in 2014-15, returning them to around their 2009-10 level (Box 1). The forecast decline in
    the terms of trade, alongside easing wage growth, is expected to lead to another two years of below average nominal GDP growth, of 3¾ per cent in 2013-14 and 4½ per cent in 2014-15

    Via Treasury

    Treasury is also predicting that unemployment will stay below trend at 1% through the year to the June quarter 2014, and then rise to 1.5% through to the same period in 2015:

    The unemployment rate is expected to increase from 5.6 per cent in the June quarter 2013 to 6¼ per cent in the June quarter 2014, and stabilise at that rate through to the June quarter 2015. Inflation is expected to ease and remain contained over the forecast period, reflecting ongoing spare capacity in the labour market and subdued wage growth.

    Now read: Leading Australian Economists Don’t Think Much Of Tony Abbott’s Plan To Boost Growth With A Corporate Tax Cut

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