Well, here’s one the for the books. This morning S&P recants yesterday’s assessment of a Government’s deficit for 2013. From the ABC:
“Our base case is for the Federal Government to return its balance to surplus in the 2013 year, and for the general government (which includes the state and local governments, and which we assign the sovereign rating to) to achieve a surplus in 2015,” another S&P credit analyst told the ABC by email.
“While we see significant downside risks to these forecasts, we believe the general government balance sheet is sufficiently strong enough for a return to surplus to be delayed a year or two without bringing pressure on the ratings.”
Here is what S&P said in the actual rationale of the release:
We estimate that Australia’s general government (federal, state, and local) will record a deficit of 2.5% of GDP in 2012, and return the balance to sur plus in 2015. We estimate that the general government debt burden will rise by 1.3% of GDP to 23.4% in 2012.
In view of our forecast of a deficit of 1.1% of GDP in 2013, we project that Australia’s general government debt burden will remain about 23% of GDP in 2013, before trending lower as the deficit shrinks further. This level of government debt is considerably lower than that of other ‘AAA’ sovereigns.
That is the equivalent of a $15 billion budget deficit. I didn’t make this calculation yesterday but clearly I should have!
So, we now have S&P calculating a surplus, a $15 billion deficit and $25 billion deficit.
Oh dear!
