- 2013/14 budget deficit at A$47bn vs. A$30.1 bn August estimate
- See net debt reaching 15.7% of GDP in 2016/17
- Sees 2013/14 GDP at 2.5% (2.5 also seen in August); 20145/15 seen at 2.5% vs. 3.0% seen in August
- Australia budget deficits totalling A$123bn over forward estimates
- Says that without policy changes, budget projected to be in deficit every year to 2023/24, debt to reach A$667bn
- Transition to non-resource drivers of economic growth likely to be slower than previously forecast
- Debt seen at A$430bn by June 2017 vs. prior estimate at 370bn
–
AUD/USD is up a fraction. It remains locked between buyers ahead of 0.8900 (and at 0.8900) and sellers on any pop higher.
A deteriorating budget position was expected, what is going to be interesting is the take on this from the ratings agencies.
Also of interest will be the reaction of consumers to the inevitable ‘budget blowout, belt tightening’ headlines that will follow – consumer sentiment is already deteriorating. (I’m adding this in later, the Wall Street Journal has already posted their take on it, here: Australia Forecasts Budget Blowout)
–
