AUSTRALIAN BUDGET: Australia sees 2025/26 budget deficit at AUD 28.3bln (vs AUD 36.8bln projected); sees 2026/27 budget deficit at AUD 31.5bln, 2027/28 deficit AUD 31.0bln; Treasurer says budget helps, rather than harms, the fight against inflation

Australia's updated budget forecasts a smaller deficit than previously projected, which may ease concerns about fiscal sustainability.

Newsquawk StaffPublished 12 May 2026, 09:52 UTCOn the live feed at 09:32 UTC — 6 more headlines followed before this page went public

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09:38

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09:36

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09:32

AUSTRALIAN BUDGET: Australia sees 2025/26 budget deficit at AUD 28.3bln (vs AUD 36.8bln projected); sees 2026/27 budget deficit at AUD 31.5bln, 2027/28 deficit AUD 31.0bln; Treasurer says budget helps, rather than harms, the fight against inflation

09:31

Germany sells EUR 4.630bln vs exp. EUR 6bln 2.50% 2028 Schatz: b/c 1.4x (prev. 1.7x), average yield 2.70% (prev. 2.47%), retention 22.8%

09:30

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CPI

Sees CPI inflation at 5% in 2025/26, 2.5% through 2029/30

GDP

Sees GDP growth at 2.25% in 2025/26, 1.75% 2026/27, 2.25% 2027/28

DEFENCE

Australia to invest AUD 53bln in defence capabilities (as touted)

NET DEBT

Sees net debt rising to 21.9% of GDP in 2029/30, gross debt to 35.6%

HOUSING

Australia limits negative gearing to new homes
Australia cuts tax breaks for landlords to help young people own a home
Australia to scrap 50% capital gains tax discount

Context

The Treasurer's assertion that the budget supports the fight against inflation, alongside a moderate CPI outlook, implies a balanced approach to fiscal policy while prioritizing growth. This could influence market sentiment, particularly in fixed income and currency spaces, as it reflects a commitment to managing inflation without aggressive austerity measures.

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