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14 May 2013
Forex Flash: Aus deficit around expectations to be received calmly by AUD - Westpac
FXstreet.com (Barcelona) - Australia’s annual federal budget (9.30GMT) is expected to show, according to Sean Callow, FX strategist at Westpac, "a headline -A$14bn deficit in 2012/13 (-0.9%/GDP), a sharp narrowing from 2011/12’s -$43.7bn but of course well short of the surplus promised until Dec 2012" the bank notes.
Sean adds: "Revenue has fallen short, mostly due to lower receipts from company, petroleum and mining taxes. A one year delay in the auction of digital spectrum rights also cut receipts by $4bn but will help 2013/14’s bottom line, which we project to be -$8bn (-0.5%/GDP). Spending appears to have actually undershot the mid-year review by about $1bn."
The bank's analyst concludes that "a deficit around our expectations should be received calmly by AUD and bond markets, especially as the major ratings agencies are likely to reaffirm Australia’s AAA rating some time in the London session."
Sean adds: "Revenue has fallen short, mostly due to lower receipts from company, petroleum and mining taxes. A one year delay in the auction of digital spectrum rights also cut receipts by $4bn but will help 2013/14’s bottom line, which we project to be -$8bn (-0.5%/GDP). Spending appears to have actually undershot the mid-year review by about $1bn."
The bank's analyst concludes that "a deficit around our expectations should be received calmly by AUD and bond markets, especially as the major ratings agencies are likely to reaffirm Australia’s AAA rating some time in the London session."