finance
Australia Projects A$28.3 Billion Budget Deficit for 2025/26
The Australian government forecasts a A$28.3 billion budget deficit for the 2025/26 fiscal year, below an earlier estimate of A$36.8 billion. Officials project continued deficits in subsequent years along with GDP growth of 2.25 percent in 2025/26 and inflation starting at 5 percent. The projections include rising net debt levels and an unemployment rate of 4.25 percent in 2025/26.
May 12, 5:40 AM·1m read1 source
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Officials forecast a A$31.5 billion deficit in 2026/27 and a A$31.0 billion deficit in 2027/28. Net debt is expected to rise to 21.9 percent of GDP by 2029/30, while gross debt reaches 35.6 percent of GDP in the same period. GDP growth is projected at 2.25 percent in 2025/26, 1.75 percent in 2026/27 and 2.25 percent in 2027/28.
CPI inflation is seen at 5 percent in 2025/26 before settling at 2.5 percent through 2029/30. The unemployment rate is forecast to stand at 4.25 percent in 2025/26 and then at 4.5 percent in both 2026/27 and 2027/28.
The projections come as officials assess the balance between fiscal policy and inflation pressures. A spokesperson for the treasurer stated that this budget helps, rather than harms, the fight against inflation. They will inform parliamentary debate on spending and revenue measures in the coming months.
