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Australia Forecasts 2020-2021 Jobless Rate of 8.75%

Australia Forecasts 2020-2021 with a Jobless Rate of 8.75% and a Budget Deficit of A$184.5Bln.

Treasurer Josh Frydenberg has begun giving the economic update.

Key numbers

  • Two deficits, $85.8bn in 2019-20 and $184.5bn in 2020-20.
  • Net debt $488.2bn at 30 June 2020 and $677.1bn the following year.
  • Tax receipts are down $31.7bn in 2019-20 and $63.9bn in2020-21.
  • Growth will fall by 3.75% this year and GDP is forecast to be 2.5% higher next year.
  • Unemployment to peak at 9.25% in the December quarter.

Frydenberg says the coronavirus crisis says Australia’s GDP will fall 3.75% in 2020, but grow by just over 2% in calendar year 2020.

He said the Australian government has introduced fiscal support measures worth $164bn, or 8.4% of GDP.

In the financial year 2019-2021, he said, the real GDP will fall by 0.25%, and in 2020-2021 it will be 2.5% down.

Frydenberg told reporters:

The coronavirus crisis has led to unprecedented economic support to the tune of around $11 trillion. Here in Australia the morrison government has deployed $289bn... the equivalent of 14.6% of GDP.

Our economic strength going into this crisis has given us the financial firepower to respond during this crisis.

He said a significant decline in tax receipts and a large increase in government payments had led to a “dramatic change in the budget position”.

These harsh numbers reflect the harsh reality we face.

Frydenberg said the coronavirus has had “a significant impact on the budget bottom line”.

Ninety-nine percent of that spending is over the financial years 2019-2020 and 2020-2021.

Our measures have been temporary, they have been targeted, and they have helped to maintain the structural integrity of the budget.

Frydenberg said Australia was still performing stronger than other comparable nations.

Despite our increased debt levels they remain lower than many comparable nations will exit this crisis with.

He said that globally, the average debt ratio is expected to exceed 100% by the end of 2020.

 

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