In May the Australian Treasury forecast a budget suplus of A$9.8bn.
The final outcome though is way above, at A$15.8bn, which is more than A$6bn better than forecast.
Revenue dropped but spending was slashed.
It’s the first consecutive year surplus in nearly 20 years. Strong commodity prices were a solid contributing factor.
At the margin, less fiscal stimulus (represented by the larger surplus) will ease inflation pressure somewhat (like I said, at the margin) and will bring forward an RBA rate cut (let me repeat, at the margin, this is not a call for an imminent RBA rate cut).
AUd update, benefitting from Fed rate cut and China stimulus
This article was written by Eamonn Sheridan at www.forexlive.com.
