Westpac preview of the Mid-Year Economic & Fiscal Outlook (MYEFO) due on Tuesday, 15th December

  • Due for release from the Australian Treasury
  • The Treasury will downgrade economic forecasts
  • Budget deficit for 2015/16 will be revised higher by around $4bn to $39bn (-2.4% of GDP)
  • Deficits for the following years will also be revised higher, for a four year deterioration of $36bn
  • Forecasts will continue to anticipate a gradual narrowing of the deficit to around $19bn (-1.0% of GDP) by 2018/19, instead of the $6.9bn projected currently
  • The weaker starting position for the budget reflects two factors: (1) weaker nominal GDP growth centred on lower commodity prices, particularly for iron ore; and (2) slower trend growth, reflecting slower population trends.