Further consensus growth downgrades likely lie ahead

The downgraded consensus of private-sector GDP forecasts surveyed by the federal government for its upcoming fiscal update still looks overly optimistic. Further negative growth surprises to the government's budgetary outlook, however, are likely to be offset by lower than budgeted interest rate assumptions. Accordingly, with the government reiterating its firm commitment to restrain spending, its revised timetable for eliminating the trivial 1% of GDP budgetary deficit is unlikely to have changed.