Australia’s Public Debt Rises, Budget Deficit Set to Soar - Forex News by FX Leaders
Australia's Public Debt Rises, Budget Deficit Set to Soar

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

Posted Friday, September 25, 2020 by
Arslan Butt • 1 min read

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%.

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