"Australia has had a great run, our economy has been almost bullet proof and our budget has done well really off the back of China... "
-Chris Richardson, director of Deloitte Access Economics
Australian government unveiled its annual budget on Tuesday, which showed a $18 billion deficit, while analysts forecasted a figure of around 20bn Australian dollars ($20bn) for the financial year 2013-14. Despite the fact, the world's two largest rating agencies kept Australia's top notch AAA rating due to the country's low public debt and prudent fiscal policy in the medium term. During the last policy meeting the RBA has cut its benchmark interest rate by 0.25% to 2.75% as the economy has been affected by weaker global demand for commodities, having a negative effect on Australia's growth and tax income. Even despite another cut, interest rates remain well above rates in other developed countries, meaning it should continue to lend the Aussie Dollar some support.
"Australia has had a great run, our economy has been almost bullet proof and our budget has done well really off the back of China... But China has slowed, [commodity] prices have come down and our budget has been revealed as in trouble," said Chris Richardson, director of Deloitte Access Economics, who is based in Sydney.
"There have been a few years that Australia could rest on its laurels...we should have been moving back to a surplus," said Rob Henderson, chief economist of markets at National Australia Bank.
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