Reserve Bank Governor Philip Lowe (Image: AAP/Joel Carrett)

Next week's budget will be presented in what will be the most propitious economic circumstances in years -- according to the Reserve Bank of Australia (RBA).

This Friday will see the RBA release its second Statement of Monetary Policy for the year, and governor Philip Lowe yesterday gave us a preview with his post-meeting statement from the May board meeting. It suggests the most optimism issued by the central bank for more than a year -- so much so that one key part of its groundbreaking monetary policy relaxation was all but terminated.

Friday's statement will show sharp upgrades to growth and jobs forecasts for the next year or so, with inflation now seen a touch higher as well because of the faster pace of activity in the economy. The RBA now expects to see economic growth of 4.75% in 2021 (up from 3.5%) as well as an unchanged forecast of 3.5% in 2022, and an unemployment rate of 4.5% in late 2022, down from 5.5%.