SYDNEY: Australia has downgraded its real GDP growth forecast by 0.25 percentage point to 2.5% for the year ending in June 2018, citing lackluster wage gains and sluggish consumption.
But the GDP forecast for next fiscal year continues to call for a 3% increase. Treasurer Scott Morrison pointed to better-than-expected economic trends in key Australian trade partners such as China and Japan.
Canberra also still targets the year beginning July 2020 for achieving Australia’s first fiscal surplus since the 2008 financial crisis. With tax revenue topping expectations this fiscal year, that eventual surplus is forecast to reach 10.2 billion Australian dollars ($7.8 billion), up from the May projection of A$7.5 billion.
Morrison reiterated plans to lower the 30% corporate tax rate for large companies. Finance Minister Mathias Cormann, who attended the news conference with Morrison, underscored a concern that Australia could fall behind other economies such as the U.S. and Europe in lowering corporate taxes.
The push to lower corporate taxes is supported by Australia’s conservative ruling coalition, but the leading opposition Australian Labor Party is against such a move.
