The Economic and Fiscal Outlook out to 2028 provides, generally, an improving economic outlook over the range of key economic and fiscal economic indicators.

Key Points:

• Economic activity (GDP) is expected to increase from -0.2 percent in the current year to 1.7 percent next year, and 3.2 percent in 2026 before growing at a slightly lower pace out to 2028.
• Inflationary pressures are expected to continue to moderate from 3.4 percent in the current year, to 2.2 percent next year before levelling out at 2.0 percent per annum out to 2028.
• Unemployment is expected to increase from 4.9 percent in the current year to peak at 5.2 percent in 2025 before declining in the outyears to reach 4.4 percent in 2028.
• The current budget deficit is expected to increase from $11.1 billion (2.7 percent of GDP) to $13.4 billion next year (3.1 percent of GDP) before recovering in the outyears.  A small surplus is forecast in 2028 of $1.5 billion (0.3 percent of GDP).
• Core Crown tax revenue will increase from $119 billion in the current year (28.8 percent of GDP) to $148.2 billion (29.5 percent of GDP).  It should be noted that tax revenue is down currently, due mainly to minuscule GDP growth (negative on a per capita basis).
• Core Crown expenses will increase from $138.3 (33.5 percent of GDP) to $156.4 billion (31.1 percent of GDP) by 2028.
• Net Core Crown debt will increase from $178.1 billion (43.1 percent of GDP) to 209.9 billion (41.8 percent of GDP).

Overall, these figures represent a long-term improvement in outcomes.  Notwithstanding, it should be noted that the operating allowances for Budgets 2025 to 2027 are very tight.  Managing within future allowances will be particularly challenging unless significant future expenditure savings are made in the out years.