Free Trial

Richer In Asia


(H3) Northbound Despite An Overbought Condition


Corrective Pullback


Firmer, Led By Futures


Markets Closed On Monday

Real-time Actionable Insight

Get the latest on Central Bank Policy and FX & FI Markets to help inform both your strategic and tactical decision-making.

Free Access

Budget: Restrained, Difficult Decisions Delayed, Soaring Power Prices


There were few surprises in the first budget of the new Labor government. It aimed to establish Labor’s economic credentials and redirected spending to its election promises. It is unlikely to impact the RBA outlook.

  • As expected, 2023-24 GDP growth was revised down 1pp to 1.5%, driving a 1pp increase in the unemployment rate, but it returns to 2.25% the following year. Inflation should peak at 7.75% later this year, in line with the RBA’s projections, and then return to target in 2024-25. This results in positive real wage growth in 2023-24.
  • Due to the $132.5bn windfall from commodities, weaker AUD and post-Covid demand recovery, the deficit and debt trajectories have improved since the Pre-Election Economic and Fiscal Outlook. The deficit is now forecast to be 1.5% of GDP in 2022-23 (-0.1pp from 2021-22) and then grow to 2% in 2024-25.
  • It is this deficit growth, while GDP recovers, that concerned commentators and implies that difficult spending and taxing decisions will need to be made going forward to reverse the forecasted A$14.4bn widening of the deficit by 2024-25 and deal with its structural problems.
  • Given the current significant economic uncertainties, Treasury’s forecasts are vulnerable and risks are skewed towards a larger deficit.
  • Energy prices are forecast to rise 56% contributing 0.75pp to 2022-23 and 1pp to 2023-24 inflation. There was no relief in the budget despite election promises.
  • In terms of details, there is A$9.7bn of new spending. 92% of the revenue windfall has gone into improving the deficit. Cost-of-living support has been restricted to election promises but won’t start until 2023.
  • A housing accord has been formed with the private sector to build a million new homes in the 5 years from 2024.
Government underlying cash balance % GDP with projections

Source: MNI - Market News/The Commonwealth of Australia/Refinitiv

Budget October 2022 Economic Forecasts

Source: MNI - Market News/The Commonwealth of Australia/Refinitiv

To read the full story

Why Subscribe to

MNI is the leading provider

of news and intelligence specifically for the Global Foreign Exchange and Fixed Income Markets, providing timely, relevant, and critical insight for market professionals and those who want to make informed investment decisions. We offer not simply news, but news analysis, linking breaking news to the effects on capital markets. Our exclusive information and intelligence moves markets.

Our credibility

for delivering mission-critical information has been built over three decades. The quality and experience of MNI's team of analysts and reporters across America, Asia and Europe truly sets us apart. Our Markets team includes former fixed-income specialists, currency traders, economists and strategists, who are able to combine expertise on macro economics, financial markets, and political risk to give a comprehensive and holistic insight on global markets.