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From Callam Pickering at Dad’s Army today:
Goldman Sachs estimate that net government debt could rise to 18 per cent of nominal GDP by 2018 — around 4 percentage points higher than forecast at last year’s budget. This could see net debt approach its mid-1990s high.
The good news is a bigger deficit means that the budget will impose a reduced fiscal drag on the broader economy. With interest rates at an historically low level — and minimal help from the states — the economy needs all the support it can get.
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About the author
David Llewellyn-Smith is Chief Strategist at the MB Fund and MB Super. David is the founding publisher and editor of MacroBusiness and was the founding publisher and global economy editor of The Diplomat, the Asia Pacific's leading geo-politics and economics portal.
He is also a former gold trader and economic commentator at The Sydney Morning Herald, The Age, the ABC and Business Spectator. He is the co-author of The Great Crash of 2008 with Ross Garnaut and was the editor of the second Garnaut Climate Change Review.
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