By Colin Packham
SYDNEY (Reuters) – Australian government debt has jumped to nearly 25% of gross domestic product (GDP), Treasurer Josh Frydenberg said on Friday, after Canberra drastically increased welfare payments as unemployment surged due to COVID-19 business closures.
Government debt for the year ending June 30 totalled A$491.2 billion ($346.6 billion), Frydenberg said, or 24.8% of the country’s GDP.
The figure is slightly higher than Australia’s official forecast in July of A$488.2 billion, or 24.6% of GDP. Back then, Australia also forecast debt would subsequently rise to about 35.7% of GDP by mid-2021.
Australian government debt was 19.2% of GDP as of June 30, 2019.
The surge in debt came despite Australia reporting a slightly smaller budget deficit for the year ending June 30.
Frydenberg said the budget swung into a massive deficit of A$85.3 billion, slightly lower than its July forecast of A$85.8 billion.
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