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​Australian treasurer guarantees 2020 budget surplus

Xinhua Financein CANBERRA
2019-01-10 15:42

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Australian Treasurer Josh Frydenberg has guaranteed he will deliver a budget surplus before May's general election despite a global ratings giant casting doubt on the prospect.

Fitch Solutions, a global macroeconomic consulting firm, on Thursday forecast that Australia's deficit would be 0.1 percent of Gross Domestic Product (GDP) in financial year 2019-20 after a deficit of 0.3 percent of GDP in 2018-19.

The projection contradicts that of Frydenberg, who in December said he would deliver a 4.1-billion-Australian dollar (2.94 billion U.S. dollars) surplus when he hands down the federal budget in April.

"The prime minister has been very clear that I'll be delivering a budget on April 2," he told Australian Broadcasting Corporation (ABC) radio on Thursday.

"This will be an important economic document, laying out our economic plan and following through from the very strong numbers we saw in the Mid Year Economic and Fiscal Outlook (MYEFO).

"We are very committed and will deliver a surplus ... we are seeing strong fundamentals."

Australian Prime Minister Scott Morrison and Frydenberg decided to deliver the budget one month earlier than usual so that the governing Liberal National Party coalition (LNP) could build its campaign for the general election, which is due in May, on the budget surplus.

However, Fitch said the government would "struggle to register a federal fiscal surplus" because of slowing economic growth.

"A slowing growth environment will likely spur the government to increase spending so as to provide support to the economy going into 2020," it said in its assessment.

Frydenberg acknowledged "cold headwinds in the global economy" but said it would not prevent him from delivering a surplus.
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