Subdued economic growth but better news on inflation

KEY ECONOMIC FORECASTS

Economic growth is expected to remain subdued from 2024/25 after coming in at 1.75 per cent in this financial year.

There is better news on inflation, which is finally forecast to return to the Reserve Bank's preferred two to three per cent target band by the end of 2024, which is earlier than expected.

Treasury believes Labor's energy bill relief and Commonwealth Rent Assistance will "directly reduce inflation" by 0.5 of a percentage point in 2024/25.

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Here are the latest forecasts, compared to those provided in May last year:

GROSS DOMESTIC PRODUCT (REAL)

* 2023/24 - 1.75 per cent (1.50 per cent)

* 2024/25 - 2.00 per cent (2.25 per cent)

* 2025/26 - 2.25 per cent (2.75 per cent)

* 2026/27 - 2.50 per cent (2.75 per cent)

* 2027/28 - 2.75 per cent (n/a)

UNEMPLOYMENT RATE

* 2023/24 - 4.00 per cent (4.25 per cent)

* 2024/25 - 4.50 per cent (4.50 per cent)

* 2025/26 - 4.50 per cent (4.50 per cent)

* 2026/27 - 4.50 per cent (4.25 per cent)

* 2027/28 - 4.25 per cent (n/a)

EMPLOYMENT GROWTH

* 2023/24 - 2.25 per cent (1.00 per cent)

* 2024/25 - 0.75 per cent (1.00 per cent)

* 2025/26 - 1.25 per cent (1.75 per cent)

* 2026/27 - 1.75 per cent (1.74 per cent)

* 2027/28 - 1.75 per cent (n/a)

CONSUMER PRICE INDEX

* 2023/24 - 3.50 per cent (3.25 per cent)

* 2024/25 - 2.75 per cent (2.75 per cent)

* 2025/26 - 2.75 per cent (2.50 per cent)

* 2026/27 - 2.50 per cent (2.50 per cent)

* 2027/28 - 2.50 per cent (n/a)

WAGE PRICE INDEX

* 2023/24 - 4.00 per cent (4.00 per cent)

* 2024/25 - 3.25 per cent (3.25 per cent)

* 2025/26 - 3.25 per cent (3.25 per cent)

* 2026/27 - 3.50 per cent (3.50 per cent)

* 2027/28 - 3.50 per cent (n/a)