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KEY FORECASTS FOR AUSTRALIA’S ECONOMY:
* The economy is expected to grow at 1.75 per cent in 2024/25, before recording real GDP growth of 2.25 per cent, 2.5 per cent and 2.75 per cent in the years following
* Unemployment is expected to rise to 4.5 per cent in 2024/25 before moderating to 4.25 per cent in 2027/28
* Inflation is expected to drop to 2.75 by the end of June before stabilising at the midpoint of the Reserve Bank of Australia’s 2-3 per cent target band in 2026/27
* Wages growth is expected to slow from 3.5 per cent to 3 per cent by mid-2025, before picking back up to 3.5 per cent by the end of 2027/28
* Workers are expected to continue to see their wages grow in real terms throughout the budget forecast period, resulting in an improvement to real household disposable income
* Growth in household consumption is expected to fall to 1 per cent in 2024/25 before picking up to 2 per cent the following year, below budget forecasts
* Growth in business investment is set to plummet from 6 per cent last financial year to 1.5 per cent in 2024/25, largely due to mining investment shrinking by 3 per cent
* The federal deficit is expected to grow from $26.9 billion in 2024/25 to $46.9 billion 2025/26, before moderating to $38.4 billion in 2026/27 and $31.7 billion in 2027/28
* Gross debt is expected to grow from $940 billion, or 34 per cent of GDP, in 2024/25 to $1.16 trillion, or 36.7 per cent of GDP, in 2027/28
* GDP growth in China – Australia’s largest trading partner – is expected to slow to 4.75 per cent in 2024 and 4.5 per cent in 2025, diminishing Australian exports and tax revenue
Jacob Shteyman
(Australian Associated Press)
