Sun. May 19th, 2024

Federal budget to reveal inflation could drop below 3 per cent by December

Tyler Mitchell By Tyler Mitchell May10,2024
Inflation is set to return to the target band of below 3 per cent by the end of the year, .
Treasury predictions in the budget, which will be handed down on Tuesday, show inflation dropping to 2.75 per cent by December.

The forecasts also show inflation remaining at 2.75 per cent by the middle of 2025, before a further drop to 2.5 per cent by the end of that year.

The modelling in the budget shows inflation falling back to within the Reserve Bank’s target range of 2-3 per cent almost one year earlier than the bank had forecast at its May meeting.
Treasurer Jim Chalmers said inflation, which stands at 3.6 per cent for the year to the March quarter, was moderating faster than Treasury previously expected.
“The budget will put downward pressure on inflation, not upward pressure on inflation. Our budget will be part of the solution to the cost-of-living pressures, not part of the problem,” he said.

“Inflation is moderating in welcome ways, but it’s not mission accomplished because people are still under pressure.”

Inflation is moderating in welcome ways, but it’s not mission accomplished because people are still under pressure.

Jim Chalmers

Treasury predicted in December’s mid-year budget update that inflation would be at 3.75 per cent for the year to June 2024.
However, Chalmers’ third budget as treasurer is also set to show a softer outlook for growth in the years ahead, with GDP downgraded.

Real GDP growth is set to be 2 per cent in 2024/25 and 2.25 per cent in 2025/26, both being 0.25 per cent lower than previous Treasury forecasts.

While the forecasts show lower estimates for inflation, the budget papers say that there remains “considerable uncertainty around the outlook for the domestic and global economy”.
“Inflation is still the big near-term challenge in our economy, which is why the government is doing its bit in the budget,” Chalmers said.

The treasurer has indicated Tuesday’s budget will aim to balance cost of living relief measures alongside measures to reduce inflation.

Tyler Mitchell

By Tyler Mitchell

Tyler is a renowned journalist with years of experience covering a wide range of topics including politics, entertainment, and technology. His insightful analysis and compelling storytelling have made him a trusted source for breaking news and expert commentary.

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One thought on “Federal budget to reveal inflation could drop below 3 per cent by December”
  1. I believe that the forecasted drop in inflation to below 3 per cent by December is a positive sign for the economy. It’s reassuring to see that the budget is expected to contribute to this decline and help alleviate some cost-of-living pressures for people. The downward trend in inflation is certainly a step in the right direction, but we must continue to monitor the situation closely to ensure sustained economic stability.

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