Australia to release final 08/09 Budget figures
Australia will release its final 2008/09 budget figures later on
Tuesday, Treasurer Wayne Swan said, adding that reports of a A$10
billion ($8.7 billion) improvement in the expected deficit were
"exaggerated".
Analysts do expect a major reduction in the deficit thanks to a
surprisingly resilient domestic economy, which is also fuelling talk
that official interest rates could rise as soon as November.
The government, ahead in opinion polls and facing re-election in late
2010, forecast a 2008/09 deficit of A$32 billion in the May budget and
saw a record A$57.6 billion deficit in 2009/10 as it borrowed to offset
a A$210 billion collapse in tax receipts.
"The stimulus has been very effective in supporting business and
supporting jobs. That will be to some extent reflected in the figures
that I put into the public arena this afternoon," Swan told Australian
radio.
"The figures that are out there (in the media) today I think are
exaggerated and I don't think that they will be the ones that you are
seeing this afternoon," he said.
Reports on Tuesday said the centre-left government would reveal an
improvement of up to A$10 billion in the past year's budget, based on a
strong economic turnaround and government stimulus spending helping to
boost employment.
The improvement could slash A$75 billion from the government's
projected debt and bring the budget back into surplus by 2014/15, a year
earlier than expected, the Australian newspaper said, citing market
economists.
Swan denied that the stimulus was putting upward pressure on official
interest rates, now at a record low of 3.0 percent, but said the central
bank would likely raise rates at some point.
Reserve Bank of Australia (RBA) Governor Glenn Stevens said on Monday
rates were unusually low and would have to be raised in a timely fashion
to avoid creating economic imbalances.
He avoided any mention of timing, but that did not stop columnist and
RBA-watcher Terry McCrann writing that it was almost certain rates would
rise to 3.25 percent in November, and again to 3.5 percent in December.
McCrann cited no sources, but investors still rushed to price in two
hikes by Christmas. November interbank futures fell 0.055 points to
96.78, implying a 30-day rate of 3.22 percent, while the December
contract shed 0.11 points to 96.570, implying a rate of 3.43 percent.
Three-month overnight indexed swap rates were up at 3.2025 percent,
from 3.135 percent at the end of last week. The RBA holds its next
policy meeting on Oct. 6, but the market is pricing in only a
one-in-five chance of a move so soon.
CANBERRA, Reuters
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