Independent economist torches treasury’s growth forecasts

A new independent report has drawn a line through the NT treasury’s economic growth forecasts. See if the Territory’s headed for recession.

Strong Territory jobs data for June has been soured by a new study that torpedoes the NT treasury’s mid-term economic forecasts.

The latest jobless figures released on Thursday showed the Territory’s unemployment rate is Australia’s second lowest.

Australian Bureau of Statistics figures show the Territory’s unemployment rate is at just 3.3 per cent, narrowly behind NSW and the ACT at 3.1 per cent but better than the 3.5 per cent national figure.

While this was 0.1 per cent increase on the Territory’s May jobless rate, the figure is 0.6 per cent lower than at the same time last year.

There are 141,100 Territorians currently employed.

At 74.3 per cent, the NT’s participation rate was the country’s highest and 1.2 per cent higher than last year.

Live cattle exports are a key economic driver in the NT.

But the strong employment news was tempered by a Deloitte Access Economics report that flipped the treasury’s growth projections on their head.

In the 2023-24 budget, the treasury forecast a projected average annual growth rate of almost 2.5 per cent over the forward estimates to 2026-27.

The Deloitte report slashed that projection, predicting the Territory’s five-year growth average between 2022-23 and 2026-27 would grow by just 1.4 per cent on average.

Worse, it has forecast negative economic growth of 1.1 per cent in the 2022-23 financial year and a 1.8 per cent decline this fiscal year.

If this forecast is accurate, it means the NT is most likely in a technical recession defined as consecutive quarters of negative economic growth.

The report said declining LNG sales were behind the surprise drop.

LNG sales are behind a forecast slump in the Territory economy.

“The decrease in economic activity is underpinned by decreased international goods and services exports (down 25.3 per cent), partly offset by increased domestic demand (up 2.7 per cent).

The report said the NT was expected to experience the weakest economic growth of all Australia’s jurisdictions in 2022-23 and predicted to be the only jurisdiction to report a decline.

The projection is the lowest in the country, with Tasmania expected to perform second worse over the forward estimates with a growth forecast of 0.8 per cent.

Opposition Treasury spokesman Bill Yan said ‘our economy under Natasha Fyles is going backwards’.

Deloitte’s 2022-23 NT growth projection is at odds with the treasury’s, which predicted a 5.1 per cent decline in gross state product in 2022-23.

Opposition treasury spokesman Bill Yan said the Territory economy was Australia’s worst performing under Labor.

“While other state economies continue to drive forward, our economy under Natasha Fyles is going backwards,” he said.

“Again, the Northern Territory is expected to have the weakest economic growth of any jurisdiction in Australia.

“Our population growth is well below the national average as Territorians sick of crime and cost of living are leaving.

“We cannot attract people to move with our reputation in tatters under Labor.”

He said a deep dive into the NT’s labour force figures showed in June the economy shed over 1600 full time jobs and 4300 part time jobs in just one month.

Treasurer Eva Lawler accused the CLP of “talking down the Territory again”.

According to the NT government’s own website, the annual size and growth of the NT economy is measured by its gross state product and from this, quarterly estimates and analysis is provided for state final demand.

“Importantly, Deloitte Access Economics forecasts annual average state final demand growth of 2.5 per cent over the five years to 2025-26, above the national average of 2.4 per cent,” Ms Lawler said.

“Since the beginning of the Covid period, Territory state final demand has increased by 18 per cent, far more than any other jurisdiction.

“Deloitte also forecasts Territory gross state product to grow at an average rate of 1.4 per cent over the five years to 2026-27.

“This is actually stronger than the 0.9 per cent forecast in the 2023-24 Territory Budget.”

Ms Lawler said the NT’s “pipeline of projects” would help the NT economy grow towards its ambitious $40bn goal by 2030.