SYDNEY, July 24 (Reuters) – Australia’s finance minister Jim Chalmers said on Monday that the country’s first budget surplus in 15 years would be even higher than originally expected.
Mr Chalmers said the budget surplus for the financial year just past was likely to be just over A$20 billion, well above the A$4.2 billion projected in the May budget first reported last month.
“Officials’ current expectations are that the 2022-2023 surplus is likely to be around $20 billion, or a little more than that,” Chalmers said at a press conference in Canberra.
Final figures, due out in the coming weeks, show a stunning turnaround from the A$37 billion deficit forecast in October, thanks to low unemployment, higher wages and higher tax revenues from record commodity exports.
The surplus won’t last long, and deficits are expected this year and next due to higher interest rates and spending on disability care, health care, and defense.
Chalmers reiterated his expectation that economic growth will slow this year. He said Australia is closely monitoring weak economic data from its biggest trading partner, China, but has not revised down its growth forecasts.
“We need to be realistic about the impact of rate hikes on the economy and this global uncertainty we are all facing. China is part of that story,” he said.
Mr Chalmers also announced that Chris Barrett will become Chairman of the Australian Productivity Commission, an independent research and advisory body. Barrett is an OECD ambassador and, like Chalmers, served as chief of staff to former Treasury Secretary Wayne Swann.
Reported by Louis Jackson, Sydney.Editing: Alasdair Pal, Sonali Paul
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