Australia’s Public Debt Rises, Budget Deficit Set to Soar

Increased fiscal stimulus measures have pushed Australia's public debt to almost 25% of GDP, especially due to higher welfare payments

Australia's Public Debt Rises, Budget Deficit Set to Soar

Increased fiscal stimulus measures have pushed Australia’s public debt to almost 25% of GDP, especially due to higher welfare payments as unemployment soared because of the coronavirus pandemic and ensuing lockdown. According to Treasurer Josh Frydenberg, government debt for a year until June rose to AUD 491.2 billion, around 24.8% of the Australian GDP.

The public debt figures beat the official forecast, which was for a reading of AUD 488.2 billion – 24.6% of the GDP. For the year ending in June 2019, it stood at 19.2% of GDP.

Australia’s budget deficit for the previous financial year is expected to have touched AUD 85.3 billion. In this financial year, it could rise further, to AUD 185 billion – more than thrice as high as the record high of AUD 54.5 billion during the 2008-09 financial crisis.

With Australia facing its first recession in nearly three decades, Frydenberg’s hopes for a surplus in the budget have been dashed as the economy could need more fiscal support. The unemployment rate in Australia has risen to 6.8% in August and is forecast to touch 10% in the coming months. Fiscal stimulus measures could continue until unemployment comes back under 6%.

ABOUT THE AUTHOR See More
Arslan Butt
Index & Commodity Analyst
Arslan Butt serves as the Lead Commodities and Indices Analyst, bringing a wealth of expertise to the field. With an MBA in Behavioral Finance and active progress towards a Ph.D., Arslan possesses a deep understanding of market dynamics.His professional journey includes a significant role as a senior analyst at a leading brokerage firm, complementing his extensive experience as a market analyst and day trader. Adept in educating others, Arslan has a commendable track record as an instructor and public speaker.His incisive analyses, particularly within the realms of cryptocurrency and forex markets, are showcased across esteemed financial publications such as ForexCrunch, InsideBitcoins, and EconomyWatch, solidifying his reputation in the financial community.

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