Tags: Australia | Growth | Forecast | Budget | Surplus

Australia Lifts Growth Forecast, Sees Budget Surplus

Tuesday, 09 Nov 2010 07:18 AM

Australia lifted its growth forecast as Asia's insatiable appetite for its natural resources continues to drive the economy, but cut spending to keep the budget on course for a small surplus by 2012-2013.

GDP growth is seen at 3.25 percent in the year ending June 30, 2011, up from a previous 3.0 percent projection but spending would be cut by A$3.5 billion ($3.5 billion) over four years to ensure a surplus of A$3.1 billion or 0.2 percent of GDP in 2012-2013, Treasurer Wayne Swan said on Tuesday.

"This update shows Australia's economy and budget in a far superior position to just about any major advanced economy, many of whom are still grappling with stubbornly high rates of unemployment, sluggish private demand, and high sovereign debt levels," Swan said after a mid-year budget update.

Spending has to be cut as the high Australian dollar is eating into export revenues, cutting budget income by around A$10 billion over four years.

The Australian dollar is trading near 28-year highs against its U.S. counterpart and the new forecasts are based on the Aussie at $0.985, compared to the previous forecasts based on $0.85.

The government also cut its unemployment forecast, to 4.75 percent for the year, from a previous 5 percent estimate.

Swan said Australia's net debt was expected to peak at 6.4 percent of GDP in 2011/12 well below levels of 60-80 percent in key developed nations.

"This will leave Australia in a substantially stronger fiscal position than any of the major advanced economies," Swan said.

© 2017 Thomson/Reuters. All rights reserved.

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Australia lifted its growth forecast as Asia's insatiable appetite for its natural resources continues to drive the economy, but cut spending to keep the budget on course for a small surplus by 2012-2013. GDP growth is seen at 3.25 percent in the year ending June 30, 2011,...
Australia,Growth,Forecast,Budget,Surplus
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2010-18-09
 

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