Australia cuts growth outlook, budget deficit still shrinks

SYDNEY (Reuters) – Australia’s recently-elected Labor authorities took a scalpel to financial progress forecasts on Thursday, warning hovering inflation and better rates of interest represented a once-in-a-decade problem.

Talking earlier than parliament, Treasurer Jim Chalmers minimize forecasted financial progress by half a proportion level for this fiscal 12 months and subsequent, He additionally predicted inflation would now peak at 7.35% reasonably than the 4.25% forecasted by the earlier authorities again in March.

The finances deficit, nonetheless, could be far decrease than forecast due to sky-high costs for a lot of of Australia’s main commodity exports and a surprisingly sharp drop in unemployment to a 48-year trough of three.5%.

(Reporting by Wayne Cole; Enhancing by Jacqueline Wong)