Original article by Michael Read
The Australian Financial Review – Page: 3 : 29-Jan-25

Deloitte Access Economics has forecast that state and federal government spending will reach a record 28 per cent of real GDP by the end of 2025. This compares with an average of 22 per cent in the decade prior to the COVID-19 pandemic. The firm has warned that despite rising government expenditure, Australians’ living standards will not recover to pre-pandemic levels until 2030. Meanwhile, Deloitte partner Stephen Smith expects that CPI data to be released today will show that inflation is moving sustainably towards the Reserve Bank’s target range of 2-3 per cent. However, he says factors such as a resilient labour market, elevated government spending and a falling Australian dollar are complicating the central bank’s decision on interest rates.

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DELOITTE ACCESS ECONOMICS PTY LTD, RESERVE BANK OF AUSTRALIA