Monday, October 22, 2012

Australia's MYEFO aka mini-budget

Today the Australian Government released the MYEFO, the Mid Year Economic and Fiscal Outlook. You will find a summary here, the original source documents here. It's really a mini-budget.

I haven't had time to go through it in detail. However, three very brief comments:

  1. It illustrates the continuing difficulty of making reasonable budget projections in the face of so many uncertainties.
  2. It is contractionary, likely to reduce GDP growth by between 0.5 and 1%, thus adding to the contractionary effects of State cuts. One commentator described all this as one foot on the break (fiscal policy), one toe on the accelerator (monetary policy).
  3. The assumptions are interesting.  One is a slight increase in the participation rate. That seems unlikely.

I am glad that I don't have to make economic forecasts on my blogs. It's much easier to focus on longer term trends!


A further sample of reporting on the MYEFO:

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