Budget Economic and Fiscal Update 2021 - Chart Descriptions

Economic Outlook

Text description for Figure 1.1 – Real production GDP

The Treasury lists here selected points describing chart Figure 1.1 – Real production GDP from its Budget Economic and Fiscal Update (BEFU) 2021:

• Chart shows two series: real GDP forecast in the Half Year Update 2020 and in the Budget Update 2021. Actuals from the June 2007 quarter to the December quarter 2020 and forecasts to the June 2025 quarter are shown.
• Actual GDP shows steady growth up until 2019, with a sharp contraction in 2020 and a recovery stronger than forecast in HYEFU.
• BEFU forecasts a contraction in GDP in the March 2021 quarter before rising at a faster rate than the HYEFU forecast to end up close to the previous trend by June 2025.

Return to Figure 1.1 – Real production GDP in the BEFU 2021 HTML version.

Text description for Figure 1.2 – Unemployment rate

The Treasury lists here selected points describing chart Figure 1.2 – Unemployment rate from its Budget Economic and Fiscal Update (BEFU) 2021:

• Chart shows two series: Unemployment as a percentage of the labour force forecast in the Half Year Update 2020 and in the Budget Update 2021. Actuals from the June 2007 quarter and forecasts to the June 2025 quarter.
• Unemployment rate in December 2020 fell to 4.9 percent, and is forecast to rise in the short term before falling to 4.0% in June 2025.
• Unemployment rate forecast rises, peaking at 5.3 percent in September 2021, compared to the HYEFU peak forecast of 6.9 percent.

Return to Figure 1.2 – Unemployment rate in the BEFU 2021 HTML version.

Text description for Figure 1.3 – Consumers Price Index

The Treasury lists here selected points describing chart Figure 1.3 – Consumers Price Index from its Budget Economic and Fiscal Update (BEFU) 2021:

• Chart shows two series: annual percentage change in the Consumers Price Index forecast in the Budget Update 2021 and in the Half Year Update 2020. Actuals from the June 2007 quarter and forecasts to the June 2025 quarter.
• Annual inflation is forecast to be higher over the forecast period compared with the Half Year Update 2020.
• Annual inflation is forecast to reach a peak of 2.4% in the June and September 2021 quarters before easing in 2022. Annual inflation then rises to reach 2.1% at the end of the forecast period.

Return to Figure 1.3 – Consumers Price Index in the BEFU 2021 HTML version.

Text description for Figure 1.4 – Potential output

The Treasury lists here selected points describing chart Figure 1.4 – Potential output from its Budget Economic and Fiscal Update (BEFU) 2021:

• Chart shows three series: Estimates of potential output for each of the HYEFU 2019, PREFU 2020 and BEFU 2021 forecasts.
• BEFU estimate of potential output fell slightly in March 2020 and sharply in June 2020 before recovering back to long-run trend levels and growth from September 2020.
• PREFU 2020 estimate of potential output did not fall in March 2020 and June 2020, instead growing at a slower rate than HYEFU 2019 over the forecast.

Return to Figure 1.4 – Potential output in the BEFU 2021 HTML version.

Text description for Figure 1.5 – Real services exports and imports

The Treasury lists here selected points describing chart Figure 1.5 – Real services exports and imports from its Budget Economic and Fiscal Update (BEFU) 2021:

• Chart shows two series: forecasts of real services exports and imports in the Budget Update 2021. Actuals from the June 2007 quarter and forecasts to the June 2025 quarter.
• Real exports and imports of services are forecast to gradually recover, but to remain below their pre-COVID-19 levels over the forecast period.
• Imports of services are forecast to have begun recovering already, while services exports are expected to fall further in the March 2021 quarter before steadily recovering.

Return to Figure 1.5 – Real services exports and imports in the BEFU 2021 HTML version.

Text description for Figure 1.6 – House prices

The Treasury lists here selected points describing chart Figure 1.6 – House prices from its Budget Economic and Fiscal Update (BEFU) 2021:

• Chart shows two series: annual percentage change in the CoreLogic House Price Index in the Budget Update 2021 and the Half Year Update 2020.
• Annual house price growth is expected to continue to accelerate over the first half of 2021, reaching a peak of 17.3% before easing to 0.9% by June 2022.
• Annual house price growth is forecast to rise to 2.5% by June 2025 in the Budget Update 2021, below the 5.5% expected by June 2025 in the Half Year Update 2020.

Return to Figure 1.6 – House prices in the BEFU 2021 HTML version.

Text description for Figure 1.7 – Real private consumption

The Treasury lists here selected points describing chart Figure 1.7 – Real private consumption from its Budget Economic and Fiscal Update (BEFU) 2021:

• Chart shows two series: Real private consumption in $billions for the Budget Update and the Half Year Update between the June 2007 and June 2025 quarters.
• Both series fall in the June 2020 quarter, bounce back sharply in the September 2020 quarter and then rise at a slower rate thereafter.
• Private consumption is forecast to continue rising over the forecast period in the Budget Update at a higher level compared to the Half Year Update.

Return to Figure 1.7 – Real private consumption in the BEFU 2021 HTML version.

Text description for Figure 1.8 – Real investment

The Treasury lists here selected points describing chart Figure 1.8 – Real investment from its Budget Economic and Fiscal Update (BEFU) 2021:

• Chart shows two series: Real business investment and real residential investment in $billions between the June 2007 and June 2025 quarters.
• Business investment falls slightly to $11.6 billion in the June 2021 quarter before rising and reaches $14.9 billion in the June 2025 quarter.
• Residential investment remains around $4.4 billion until the December 2021 quarter, before rising gradually and reaches $5.0 billion in the June 2021 quarter.

Return to Figure 1.8 – Real investment in the BEFU 2021 HTML version.

Text description for Figure 1.9 – Goods terms of trade

The Treasury lists here selected points describing chart Figure 1.9 – Goods terms of trade from its Budget Economic and Fiscal Update (BEFU) 2021:

• Chart shows three series: The goods terms of trade for the main forecast and the upside and downside scenarios.
• The upside scenario reaches a peak of 1323 (compared to 1288 in the main scenario) in the December 2021 quarter, before falling to 1266 in the June 2025 quarter.
• The downside scenario reaches a trough of 1221 in the March 2022 quarter before recovering to 1249 in the June 2025 quarter.

Return to Figure 1.9 – Goods terms of trade in the BEFU 2021 HTML version.

Text description for Figure 1.10 – Real production GDP

The Treasury lists here selected points describing chart Figure 1.10 – Real production GDP from its Budget Economic and Fiscal Update (BEFU) 2021:

• Chart shows 3 series: real production GDP, in $ billions, for the main forecast and the upside and downside scenarios, between June 2007 and June 2025.
• In the upside scenario, GDP rises slightly in the March 2021 quarter instead of falling slightly as in the main forecast. GDP rises faster over 2021 and 2022, and is $75.1 billion in June 2025.
• In the downside scenario, GDP growth is much weaker throughout 2021. GDP then recovers in line with the main forecast, and is $73.8 billion in June 2025 ($74.3 billion in the main forecast).

Return to Figure 1.10 – Real production GDP in the BEFU 2021 HTML version.

Text description for Figure 1.11 – Unemployment rate

The Treasury lists here selected points describing chart Figure 1.11 – Unemployment rate from its Budget Economic and Fiscal Update (BEFU) 2021:

• Chart shows 3 series: the unemployment rate, as a percentage of the labour force, for the main forecast and the upside and downside scenarios, between June 2007 and June 2025.
• In the upside scenario, unemployment falls throughout 2021 instead of rising slightly as in the main forecast. Unemployment falls to 4.2 in June 2022 and then remains relatively flat.
• In the downside scenario, unemployment rises higher from June 2021, reaching a peak of 5.9% (5.3% in the main forecast). Unemployment then falls in line with the main forecast.

Return to Figure 1.11 – Unemployment rate in the BEFU 2021 HTML version.

Text description for Figure 1.12 – Net core Crown debt to GDP ratio

The Treasury lists here selected points describing chart Figure 1.12 – Net core Crown debt to GDP ratio from its Budget Economic and Fiscal Update (BEFU) 2021:

• Chart shows 3 series: net core Crown debt, as a percentage of GDP, for the main forecast and the upside and downside scenarios, between June 2007 and June 2025.
• In the downside scenario, net core Crown debt is higher in each forecast year, and reaches a peak of 51.4% of GDP in 2023. In 2025, net core Crown debt is 47.7% of GDP.
• In the upside scenario, net core Crown debt is lower in each forecast year, and reaches a peak of 46.0% of GDP in 2023. In 2025, net core Crown debt is 40.5% of GDP.

Return to Figure 1.12 – Net core Crown debt to GDP ratio in the BEFU 2021 HTML version.

Text description for Figure 1.13 – Goods terms of trade and TWI

The Treasury lists here selected points describing chart Figure 1.13 – Goods terms of trade and TWI from its Budget Economic and Fiscal Update (BEFU) 2021:

• Chart shows 2 series: the goods terms of trade index and the trade-weighted exchange rate index (TWI), between June 2007 and June 2025.
• The terms of trade index rises to a peak of around 1290 in mid-2021, before gradually falling to around 1260 in June 2025.
• The TWI rises to 74.9 in the March 2021 quarter, then falls slightly to 74.5 in the June 2021 quarter and remains flat until 2024, before rising to 75.1 in June 2025.

Return to Figure 1.13 – Goods terms of trade and TWI in the BEFU 2021 HTML version.

Text description for Figure 1.14 – Current account balance and its components

The Treasury lists here selected points describing chart Figure 1.14 – Current account balance and its components from its Budget Economic and Fiscal Update (BEFU) 2021:

• Chart shows four series: the current account balance, the goods balance, the services balance, and the income balance, all as percentages of GDP.
• The annual trade balance is forecast to move back into deficit in the second half of 2021.
• The annual services balance is forecast to be in deficit until the June quarter of 2023 owing to the slow recovery in visitor arrivals.

Return to Figure 1.14 – Current account balance and its components in the BEFU 2021 HTML version.

Text description for Figure 1.15 – Global activity indicators

The Treasury lists here selected points describing chart Figure 1.15 – Global activity indicators from its Budget Economic and Fiscal Update (BEFU) 2021:

• Chart shows four series: Manufacturing Purchasing Managers' Index (PMI), services PMI, industrial production, and trade volumes, at the global level. The PMI series are expressed as deviations from 50, where above zero indicates expansion. The other series show deviation from an index.
• Both the manufacturing and services PMIs fell sharply in the June quarter, but the latter fell much more sharply owing to restrictions on face-to-face activity.
• Global trade volumes and industrial production have recovered to above pre-pandemic levels, underpinned by robust consumer demand and policy support.

Return to Figure 1.15 – Global activity indicators in the BEFU 2021 HTML version.

Text description for Figure 1.16 – Real GDP in trading partner economies

The Treasury lists here selected points describing chart Figure 1.16 – Real GDP in trading partner economies from its Budget Economic and Fiscal Update (BEFU) 2021:

• Chart shows six series: the real GDP levels in China, Australia, Japan, the United States, the Euro area, and the United Kingdom, all indexed to the December quarter of 2019.
• The global recovery has been uneven, depending on the ability to control virus outbreaks, restrictions on activity, and policy support.
• China's recovery is more advanced than most other major economies, and its real GDP level was already above pre-pandemic levels by the June 2020 quarter.

Return to Figure 1.16 – Real GDP in trading partner economies in the BEFU 2021 HTML version.

Fiscal Outlook

Text description for Figure 2.1 – Core Crown tax revenue

The Treasury lists here selected points describing chart Figure 2.1 – Core Crown tax revenue from its Budget Economic and Fiscal Update (BEFU) 2021:

• Chart shows two series: Annual core Crown tax revenue in nominal terms (as a bar chart) and as a percentage of GDP (as a line chart). Both show actuals since 2011 and forecasts from 2021 to 2025.
• Core Crown tax revenue is forecast to increase by $21.7 billion across the forecast period, reaching $113.2 billion in 2025.
• Core Crown tax revenue initially declines to 26.6% of GDP in 2021/22 and then remains relatively stable across the rest of the forecast period.

Return to Figure 2.1 – Core Crown tax revenue in the BEFU 2021 HTML version.

Text description for Figure 2.2 – Core Crown tax revenue and nominal GDP growth

The Treasury lists here selected points describing chart Figure 2.2 – Core Crown tax revenue and nominal GDP growth from its Budget Economic and Fiscal Update (BEFU) 2021:

• Chart shows two series: Annual core Crown tax revenue growth percentage and nominal GDP growth percentage (on a line chart). Both show actuals since 2011 and forecasts from 2021 to 2025.
• Tax revenue is higher than GDP growth in both 2021 and 2023 but lower in 2022.
• In 2024 and 2025, core Crown tax revenue is forecast to grow in line with nominal GDP growth.

Return to Figure 2.2 – Core Crown tax revenue and nominal GDP growth in the BEFU 2021 HTML version.

Text description for Figure 2.3 – Core Crown expenses

The Treasury lists here selected points describing chart Figure 2.3 – Core Crown expenses from its Budget Economic and Fiscal Update (BEFU) 2021:

• Chart shows two series: Annual core Crown expenses in nominal terms (as a bar chart) and as percentage of GDP (as a line chart). Both show actuals since 2011 and forecasts from 2021 to 2025.
• Core Crown expenses are elevated across the forecast, reaching $121.1 billion by 2024/25.
• Core Crown expenses as a percentage of GDP are forecast to gradually decline across the forecast, from 33.1% in 2021 to 29.2% in 2025.

Return to Figure 2.3 – Core Crown expenses in the BEFU 2021 HTML version.

Text description for Figure 2.4 – Budget operating allowances

The Treasury lists here selected points describing chart Figure 2.4 – Budget operating allowances from its Budget Economic and Fiscal Update (BEFU) 2021:

• Chart shows one series: Cumulative impacts of Budget operating allowances on expenditure for 2023, 2024 and 2025.
• Budget operating allowances are set at $2.7 billion per year for Budget 2022 through to Budget 2024.
• Cumulative impacts of Budget opertaing allowances adds $8.1 billion of expected operating expenses by 2025.

Return to Figure 2.4 – Budget operating allowances in the BEFU 2021 HTML version.

Text description for Figure 2.5 – Components of OBEGAL by segment

The Treasury lists here selected points describing chart Figure 2.5 – Components of OBEGAL by segment from its Budget Economic and Fiscal Update (BEFU) 2021:

• Chart shows two series: Annual OBEGAL by segment (Core Crown, Crown entities and SOEs) (on a stacked bar chart) and annual Crown OBEGAL after intersegment eliminations (on a line chart). Both show actuals since 2011 and forecasts from 2021 to 2025 (in nominal terms).
• Forecasts show an OBEGAL deficit in all years that peaks at $18.4 billion in 2021/22 before reducing to $2.3 billion in 2024/25.
• The core Crown segment is the biggest contributor to the OBEGAL deficit, followed by the Crown entities segment.

Return to Figure 2.5 – Components of OBEGAL by segment in the BEFU 2021 HTML version.

Text description for Figure 2.6 – Core Crown residual cash

The Treasury lists here selected points describing chart Figure 2.6 – Core Crown residual cash from its Budget Economic and Fiscal Update (BEFU) 2021:

• Chart shows three series: Annual residual cash in nominal terms, with and without the impacts of the Funding for Lending Programme (both on a line chart) and residual cash split by operating and capital cashflows (on a bar chart), for 2020 actuals and forecast to 2025.
• Reducing cash deficits are forecast in the first four years, with a small cash surplus in the final year of the forecast.
• Funding for Lending Programme has a significant impact on residual cash, initially adverse reflecting cash advances made by the Government.

Return to Figure 2.6 – Core Crown residual cash in the BEFU 2021 HTML version.

Text description for Figure 2.7 – Net core Crown debt

The Treasury lists here selected points describing chart Figure 2.7 – Net core Crown debt from its Budget Economic and Fiscal Update (BEFU) 2021:

• Chart shows three series: Annual net core Crown debt in nominal terms (bar chart) and as percentage of GDP, with and without the impacts of the Funding for Lending Programme (both shown on a line chart). These show actuals since 2011 and forecasts from 2021 to 2025.
• Net core Crown debt as percentage of GDP increases from 26.3% in 2020 to 48.0% in 2023, before gradually lowering and reaching 43.6% in 2025.
• Net core Crown debt in nominal terms is forecast to increase by $97.4 billion from 2020, reaching $180.8 billion in 2025.

Return to Figure 2.7 – Net core Crown debt in the BEFU 2021 HTML version.

Text description for Figure 2.8 – OBEGAL cyclically-adjusted balance (CAB)

The Treasury lists here selected points describing chart Figure 2.8 – OBEGAL cyclically-adjusted balance (CAB) from its Budget Economic and Fiscal Update (BEFU) 2021:

• Chart shows five series: Annual OBEGAL, the cyclically-adjusted balance (CAB), and structural balance as a percentage of GDP (all on a line chart) with the areas in between these series showing the quantity of automatic stabilisers and EQC and Southern Response payments.
• The OBEGAL deficit of 7.3% of GDP in 2020 gradually reduces over the forecast period with a portion of the deficit in 2021 and 2022 being explained by automatic stabilisers.
• A cyclically-adjusted deficit of 1.1% of GDP remains at the end of the forecast period.

Return to Figure 2.8 – OBEGAL cyclically-adjusted balance (CAB) in the BEFU 2021 HTML version.

Text description for Figure 2.9 – Fiscal impulse and cyclically-adjusted primary balance

The Treasury lists here selected points describing chart Figure 2.9 – Fiscal impulse and cyclically-adjusted primary balance from its Budget Economic and Fiscal Update (BEFU) 2021:

• Chart shows two series: The cyclically-adjusted primary balance (as a line chart) and the fiscal impulse (as a bar chart) as a percentage of nominal GDP.
• A fiscal impulse of 6.2% of GDP becomes negative in 2021 and remains negative for most of the forecast period.
• The cyclically-adjusted primary balance gradually improves over the forecast period.

Return to Figure 2.9 – Fiscal impulse and cyclically-adjusted primary balance in the BEFU 2021 HTML version.

Text description for Figure 2.10 – Core Crown expenses compared to the Half Year Update

The Treasury lists here selected points describing chart Figure 2.10 – Core Crown expenses compared to the Half Year Update from its Budget Economic and Fiscal Update (BEFU) 2021:

• Chart shows one series: Core Crown expenses for 2020 and forecasts to 2025 for the Budget Update compared to the Half Year Update forecast.
• Core Crown expenses in 2021 were $3.5 billion lower than the Half Year Update before the trend reverses from 2022.
• Core Crown expenses are higher in all years from 2022 to 2025 compared to the Half Year Update.

Return to Figure 2.10 – Core Crown expenses compared to the Half Year Update in the BEFU 2021 HTML version.

Text description for Figure 2.11 – Core Crown residual cash compared to the Half Year Update

The Treasury lists here selected points describing chart Figure 2.11 – Core Crown residual cash compared to the Half Year Update from its Budget Economic and Fiscal Update (BEFU) 2021:

• Chart shows one series: Core Crown residual cash for 2020 and forecast to 2025 for the Budget Update compared to the Half Year Update forecast.
• Residual cash is in deficit position until 2024, but is better when compared to the Half Year Update forecast by $8.9 billion.
• Residual cash deficits are higher in 2022 and 2023 reflecting the impact of the Funding for Lending Programme, before repayments are forecast from 2024.

Return to Figure 2.11 – Core Crown residual cash compared to the Half Year Update in the BEFU 2021 HTML version.