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Australia budget deficit to reach $30 billion

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Staff writer ▼ | August 5, 2013
Australia will report a budget deficit of $30.1 billion for the fiscal year, almost 100% more than its May estimate of $18 billion.
Australia
AustraliaAustralia will report a budget deficit of $30.1 billion for the fiscal year, almost 100% more than its May estimate of $18 billion.


Federal Treasurer Chris Bowen said Australia is undergoing "economic transition" and that it is "not a crisis". Mr. Bowen said that Australia will experience weaker economic growth, increased unemployment, and more government debt.

The forecast 2014-2015 deficit has jump to $24 billion from the previously $10.9 billion and the government must find a way to trim down the deficit for the 2016 and 2017.

Although the new data may seem bad, it's not that bad: Australia's 2013-2014 deficit will be 1.9 percent of GDP, compared the US deficit of 5.4 percent, Japan's 7 percent, or the euro zone's 2.6 percent. The country is expected to reach a surplus in 2016-2017 of $4 billion. Analysts are skeptical because that number is lower than the May figure of $6.6 billion.

Australia growth has slowed to 2.5 percent, still above the 1.7 percent US economic expansion, but much lower than its Pacific counterparts. Unemployment isn't expected to drop until at least 2015, according to the updated economic outlook. The jobless is expected to rise from 5.5 percent to 5.75 percent, and is exptectd to expand to 6.25 percent before returning below 5 percent in 2015.


 

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