Treasury’s Half Yearly Economic and Fiscal Update offers a rosy outlook for the next few years. Growth is expected to be around 3.5% and averaging 3% over the next five years.
This is accompanied by low inflation, an expectation of continuing low interest rates, and reducing unemployment, dropping from the current 5% to a forecasted 4.6% in 2018 and 4.3% in the forecasts for 2021.
150,000 new jobs are forecast, and average wage growth is also expected to be relatively modest, supported by continued net migration. But nonetheless the average wage is expected to increase $7,500 to $66,000 in 2021.
“This economic outlook delivers a strongly growing tax take – some $4 billion more each year,” said Richard Forgan, PwC Partner.
“But it also emphasises the need to continue to restrain public expenditure, to keep pressure off an economy that must be operating at close to capacity.”
Capital expenditure is forecast to substantially increase, with a new allowance of $3 billion.
“The Government’s commitment to continued investment in infrastructure and to support improved public services is certainly welcome,” said Mr Forgan.