Bulletin: Commodities Boom Bolsters Australia's Budget

MELBOURNE (S&P Global Ratings) Oct. 25, 2022--Australia's strong economic conditions set a solid base for the new Labor government's first budget. A humming economy and high commodity prices are delivering a large windfall in today's budget. This windfall should improve fiscal outcomes that underpin our rating on the sovereign (AAA/Stable/A-1+). We expect the general government deficit, including the Commonwealth and state governments, to continue recent momentum and narrow to less than 3% of GDP over the next few years. We estimate the 2022 deficit was about 3.2%; about a third of that incurred in 2021. Ongoing weather events including recent floods will result in higher financial support and infrastructure spending across the country. This is unlikely to weigh materially on

...MELBOURNE (S&P Global Ratings) Oct. 25, 2022--Australia's strong economic conditions set a solid base for the new Labor government's first budget. A humming economy and high commodity prices are delivering a large windfall in today's budget. This windfall should improve fiscal outcomes that underpin our rating on the sovereign (###/Stable/A-1+). We expect the general government deficit, including the Commonwealth and state governments, to continue recent momentum and narrow to less than 3% of GDP over the next few years. We estimate the 2022 deficit was about 3.2%; about a third of that incurred in 2021. Ongoing weather events including recent floods will result in higher financial support and infrastructure spending across the country. This is unlikely to weigh materially on Australia's economic and fiscal outlook. Strong economic conditions and higher inflation are delivering higher tax revenues to the government. This will cover new spending commitments and higher outflows on social...

Bulletin