Budget Paper No.2 Fiscal and Economic Outlook 2008-2009
Tabled paper 1293
Tabled papers for 10th Assembly 2005 - 2008; Tabled papers; ParliamentNT
Tabled By Delia Lawrie
Made available by the Legislative Assembly of the Northern Territory under Standing Order 240. Where copyright subsists with a third party it remains with the original owner and permission may be required to reuse the material.
7 Economic prospects are strong in 2008-09 with gross state product (GSP) growth forecast to be 6.6 per cent, underpinned by a substantial increase in exports and solid residential employment and population growth. 2003-04 2004-05 2005-06 2006-07 2007-08e 2008-09f % % % % % % Real GSP 2.0 5.5 5.5 5.6 2.8 6.6 Resident Employment - 2.9 - 1.3 3.0 5.3 4.8 2.5 Population1 0.7 1.6 2.3 2.0 2.2 1.9 Darwin CPI2 2.1 1.6 2.6 4.4 3.43 3.1 e: estimate; f: forecast 1 As at December, annual percentage change 2 As at December, year on year percentage change 3 Actual Darwin CPI 2007 Economic growth is forecast to strengthen as the contribution from exports increases substantially. A full recovery from the temporary closures of both the Wickham Point liquefied natural gas plant and the Corallina oilfield, as well as significantly higher oil production from the Puffin field, will be the main contributors to export growth in 2008-09. In addition, the production of lead-zinc will increase significantly with the conversion to open cut operations at McArthur River reaching completion. Output of manganese from Bootu Creek and GEMCO, alumina from Alcan and iron ore from the Frances Creek mine will also contribute to strong economic growth in 2008-09. Resident employment growth of 2.5 per cent is forecast for 2008-09, underpinned by residential construction and work on major projects, and continued migration and tourism growth. The more modest employment growth rate forecast for 2008-09 is in line with the forecast moderation in state final demand growth over the same period. Population growth is forecast to moderate to 1.9 per cent in 2008, with net interstate migration returning towards longer run averages due to the completion of some major employment generating projects. Inflation in the Territory is expected to continue to moderate in 2009. Darwin CPI growth of 2.8 per cent is forecast for 2009, down from the 3.1 per cent estimated for 2008. The continued softening of inflationary pressures in 2009 is attributed to interest rate increases, house price growth moderating further and lower crude oil prices relative to 2008. Wages growth in the Territory is expected to strengthen in 2008 as outcomes of enterprise bargaining agreements flow through to stronger public sector wages growth. In addition, ongoing skilled labour shortages and a tight labour market are expected to flow through to growth in the Territorys Wage Price Index, averaging around 4.0 per cent over the year. Economic Outlook Table 1.3: Territory Economic Indicators
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