Wayne Swan has unveiled a significant improvement in the Government’s fiscal position from next year, with this morning’s Mid-Year Economic Forecasts showing far higher economic growth and lower unemployment than the Budget forecast back in May.
The Budget forecasts, made in the midst of what looked to be a prolonged local impact of a global recession, showed virtually flat economic growth and unemployment continuing to rise into 2011 to 8.5. But Australia has experienced only one quarter of negative GDP and unemployment has remained below 6% so far. MYEFO predicts unemployment will peak this financial year instead of next year, at 6.75%, before falling back to its current level by 2012-13. Economic growth will be 1.5% this year (a 2% increase on the May forecast), 2.75% next year and then there will be a more moderate recovery in the following years of 4% rather than 4.5%.