The government’s July budget update gave an insight into the economic impact of the health crisis.
The economy contracted by an estimated 0.25% in 2019-20, with a further fall of 2.5% in 2020-21.
The budget deficit is estimated to be:
- $85.8 billion in 2019-20 (4.3% of GDP; and
- $184.5 billion in 2020-21 (9.7% of GDP).
This would be the biggest deficit as a share of GDP since 1946 in the aftermath of WWII.
The current cash target rate of 0.25% has been left unchanged.
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