Australian Economic Overview June 2012

Australian Economic Overview

The Australian growth rate declined in the first months of 2012 to around 2.5%, though this is forecast to improve to around 3.25% in the next year. The May Federal Budget was contractionary compared to the previous year as the government aims to book a headline surplus, though the underlying deficit is still running at around 0.9% of GDP. A 0.5% reduction in the cash rate by the RBA in May and a further 0.25% reduction in June will offset tighter fiscal conditions to an extent.

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