Australian Government (Department of Treasury) Mid-year Economic and Fiscal Outlook (MYEFO), main points:
- 2023/24 budget deficit at a$1.1 bln vs a$13.9 bln projected in May
- Budget deficit projected at a$18.8 bln in 2024/25, deficit a$35.1 bln 25/26
- Sees GDP growth in 2023/24 1.75%, 2024/25 2.25%, 2025/26 2.5%
- Sees unemployment rate at 4.25% in 2023/24 and 4.5% to 2025/26
- Sees CPI inflation at 3.75% in 2023/24, 2.75% in 2024/25, 2.5% in 2025/26
- To ensure fiscal and monetary policy settings are aligned, help ease inflationary pressures
- Sees net migration slowing to 375,000 in 2023/24, 250,000 in 2024/25
- Sees iron ore declining to $60 tonne, metallurgical coal $140 tonne, thermal coal $70 tonne
Bolding above is mine. Earlier this week Australia's Treasurer announced his new agreement with the Reserve Bank of Australia, trumpeting the importance of the mid-point of the Bank's 2 to 3% inflation target band:
The 2.5% rate is a long way off according to these MYEFO forecasts.
Note, Australia's fiscal year in July to June, hence 2025/26 is July 2025 to June 2026. Huh, regardless of how I type it out it still looks a looooong way off before that target will be hit. RBA, higher for longer folks. Should be a net tailwind for AUD as other DM central banks cut sooner.
Treasurer Chlamers
