Fed Govt Mid-Year Economic Outlook...
The Federal Government has updated its budget deficit projections and economic assumptions in the Mid-Year Economic and Fiscal Outlook (MYEFO). Thanks to a combination of stronger than expected economic growth and a higher than expected iron ore price, revenue growth has increased and projections for outlays have been lowered. As a result, the budget deficit for 2020-21 has been revised down to $197.7bn (or 9.9% of GDP) from $213.7bn just 10 weeks ago in the October Budget. This is still a record budget deficit, and as a share of GDP is still the largest since WW2. However, it’s likely that – providing we continue to keep coronavirus under control in Australia and vaccines become widely available through 2021 enabling a continuing recovery in the economy - we have now seen the peak in the budget deficit.