News
Wealth Pi Fortnightly Economic Snapshot
Interest Rates
As of 17 April 2025, the RBA Rate Indicator shows a 62% market expectation of a 0.5% interest rate cut at the upcoming 20 May RBA Board meeting, following the decision to hold the cash rate at 4.10% on 1 April, amid falling futures yields and shifting investor sentiment.
RBA
On 1 April 2025, the RBA Board held the cash rate at 4.10%, citing ongoing moderation in underlying inflation and improving domestic demand, while remaining cautious due to persistent uncertainties in global conditions, labour markets, and inflation dynamics.
Australian Markets
In 2023–24, Australia’s defence industry grew by 12.4% to contribute $11.9 billion in gross value added and employ 69,400 people, with South Australia leading national growth and professional services and manufacturing as the top contributing sectors.
Global Markets
US:
In US, while President Trump’s sweeping tariffs are expected to raise near-term inflation and slow economic growth—posing risks to homebuilding and policy decisions—mortgage rates edged down again this week, with more declines likely soon, even as buyer activity remains cautious despite increased home listings.
UK:
From April 2025, 83% of homeowners and 42% of first-time buyers in England and Northern Ireland will pay more stamp duty as previous rate bands return, adding up to £2,500 per purchase and raising an estimated £1.1 billion annually for the government.
Property
National rents rose 1.7% in the March 2025 quarter due to seasonal factors, but underlying rental growth continues to slow amid worsening affordability, larger household sizes, and easing population growth, with CoreLogic projecting subdued rent increases in coming quarters despite tight vacancy rates and limited supply.
2025–26 Australian Federal Budget Highlights
Delivered on March 25, 2025, ahead of the May federal election, the budget focuses on cost-of-living relief, healthcare, housing, and economic resilience:
- Tax Relief: Introduction of tax cuts totalling over A$17 billion over five years, aiming to alleviate household financial pressures without exacerbating inflation. Financial Times
- Healthcare Investments: Allocation of $8.5 billion to enhance Medicare bulk-billing services, $1.8 billion for public hospitals, and funding for 50 additional Medicare urgent-care clinics. Wikipedia
- Energy Subsidies: Provision of $1.8 billion to extend electricity bill relief through the end of 2025. Wikipedia
- Housing Initiatives: Investment of $9.2 billion in social and affordable housing projects and expansion of the Help to Buy scheme with an $800 million boost. Wikipedia
- Education and Workforce Development: Permanent establishment of free TAFE programs and a $3.6 billion fund to increase wages for early childhood educators. Wikipedia
- Defence and Infrastructure: Increased defence spending, including $1 billion for various initiatives, and $17.1 billion allocated for infrastructure projects across the country. Wikipedia
Despite these investments, the budget projects a deficit of A$27.6 billion, marking a return to deficit after two years of surplus
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