Australia’s Finance Minister Jim Chalmers is expected to release data in September showing that Australia is expected to achieve a second multi-billion dollar budget surplus, a surplus rate of about 15%, or a record high of consecutive surpluses, reflecting the effectiveness of the government’s fiscal management, despite the challenges faced by external factors, such as the volatility of commodity prices. However, in the coming years, the budget may turn into a deficit due to economic weakness and structural challenges, while the risks of high inflation and interest rate hikes remain. Both the Reserve Bank Governor and Chalmers emphasized the importance of surpluses for economic stability and easing inflationary pressures.
The Reserve Bank of Australia is scheduled to meet on August 5-6, and the market forecasts a 65% chance of a rate hike to 4.6% this year, but in a recent survey, most economists believe the RBA will leave the cash rate unchanged.
Australia contrasts with U.S. monetary policy, which is expected to cut rates as inflation peaks higher and earlier. Charles said the U.S. could take the lead in the face of inflation challenges.
The Australian Government needs, first, to promote economic growth by encouraging investment, innovation and enterprise development to stimulate economic growth and thus raise tax revenues; second, to control inflation, such as interest rate adjustments to control inflation and maintain price stability; third, to improve labour market flexibility by reforming labour regulations and training programmes; and fourth, to strengthen international cooperation and work with other countries to address global challenges. By adopting the above comprehensive measures, the economic challenges ahead will be addressed.
