(Bloomberg) -- Australia will deliver a second budget surplus of billions of dollars in the “mid-teens,” according to the nation’s Treasurer.
Official figures would come in September, Treasurer Jim Chalmers told Sky News on Sunday. “We already know enough about it to expect that Labor’s second surplus will be somewhere around the mid-teens,” Chalmers said. “That could be the biggest back-to-back surpluses on record.”
Typically, a budget surplus in Australia is a victory for the government as it indicates strong oversight — even if driven by external forces such as higher commodity prices. The budget is expected to swing back into deficit in subsequent years as a structural shortfall and weaker economy take a toll. Meanwhile, inflation remains sticky and further interest rate rises are possible.
“The governor of the Reserve Bank has said those two surpluses are really important,” Chalmers said. “They’re helping put downward pressure on inflation.”
The Reserve Bank of Australia meets next Aug. 5-6. Market pricing implies a 65% chance of a hike to 4.6% this year, though a Bloomberg survey from June 28 to July 1 showed a majority of economists expected the RBA to keep the cash rate steady. That’s a contrast to the US, where rate cuts are expected.
“The Americans are a little bit ahead because they peaked higher and earlier,” he said. “We’ve all got some version of these inflation challenges.”
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