Australia's Budget in Better Shape than Anticipated, Deficit Forecast at 0% of GDP

Improvement extends into fiscal 2025, with government planning to spend billions on housing, critical minerals projects, and clean energy.

Australia's budget update shows the government's books are in better shape than anticipated due to persistent strength in commodity prices and a tight labor market.
The deficit is forecast at A$1.1 billion ($722 million) in the 12 months through June 2024, or 0% of GDP, a significant improvement from the May budget's estimated A$13.9 billion shortfall.
The improvement extends into fiscal 2025 with the shortfall seen at A$18.8 billion, or 0.7% of GDP, almost half the May forecast.
The government's forecasts show headline inflation will slow to 2.75% by mid-2025, a more optimistic assessment than the RBA's estimates released last month that had CPI only easing to the top of its 2-3% target by the end of 2025.
The government will spend A$5 billion to improve housing supply and affordability and A$3 billion toward critical minerals projects and clean energy; it also earmarked A$6.8 billion for current infrastructure projects.