22 Sep Australia’s “eye popping” budget deficit & public debit blow out
Key Points:
- The Australian Federal budget next month will likely see a further blow out in the budget deficit due to the ongoing hit to tax revenue & more stimulus. We expect an “eye popping” 2020-21 deficit of around $230bn.
- Stepping up economic reforms will help grow the economy but are unlikely to drive a repeat of the rapid post WW2 decline in the budget deficit and public debt.
- We likely have to get used to a long period of high public debt. This is not necessarily a big problem.