Fed:Goverment cuts 06/07 growth forecast, ups budget surplus

AAP General News (Australia)
12-20-2006
Fed:Goverment cuts 06/07 growth forecast, ups budget surplus

The federal government's slashed its economic growth forecast for the current fiscal
year because of the drought .. but it's maintained a healthy cash surplus in its mid-year
budget review .. out today.

PETER COSTELLO says Australia's economic growth forecast has been cut from 3.25 per
cent to 2.5 per cent.

But the treasurer's raised the forecast for the underlying cash surplus from 10.8 billion
dollars to 11.8 billion for 2006/07.

Mr CoSTELLO says it reflects unexpectedly strong employment growth and and high company
tax receipts.

He says the Mid-Year Economic and Fiscal Outlook report shows Australia's economy remains
sound .. although it's being affected by severe drought.

Mr COSTELLO says drought will cut farm growth by 20 per cent.

AAP RTV cb/sb/tm/rt

KEYWORD: BUDGET REVIEW (CANBERRA)

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