Mid-Year Economic and Fiscal Outlook 2021-22 (MYEFO)
16 December 2021
Treasurer Josh Frydenberg and Minister for Finance Simon Birmingham today delivered the Mid-Year Economic and Fiscal Update (MYEFO), asserting Australians have good reason to be optimistic for the future as the economy is rebounding strongly. In addition, more Australians are returning to work with around 180,000 more people employed today than at the start of the pandemic.The Treasurer revealed Australia’s budget deficit is estimated to reach $99.2 billion in 2021-22, down from the $106.6 billion forecast in the May Federal Budget. Mr Frydenberg welcomed the latest labour force figures, stating unemployment is expected to fall to 4.5 per cent by June next year and fall further to 4.25 per cent by mid-2023. Real GDP growth of 3.75 per cent is expected for this financial year, with a forecast of 3.5 per cent for 2022-23.
The Treasurer credited the Morrison Government’s response to the ongoing pandemic, including the Delta outbreak, for the strength of the Australian economy rebounding. Mr Frydenberg said Australia has performed stronger than any major advanced economy throughout the pandemic. The mid-year budget papers include $16 billion in decisions taken but not yet announced, with $5.5 billion set aside for this financial year and $4.1 billion for 2022-23, suggesting the Government has budgeted for future policy announcements it will make closer to next year’s election.
Key economic indicators:
- Real GDP is forecast to grow 3.75 per cent in 2021-22 and 3.5 per cent in 2022-23.
- Unemployment is forecast to fall to 4.5 per cent this financial year and drop further to 4.25 per cent in 2022-23.
- Australia’s budget deficit is forecast to be $99.2 billion in 2021-22, down from the estimated $106.6 billion.
- The Wage Price Index is expected to increase by 2.25 per cent this financial year up from the initial forecast of 1.5 per cent in the May budget, and 2.75 per cent through the year to the June quarter of 2023.
- Net debt is projected to reach $914.8 billion by 2025, down from $980.6 billion originally forecast.