Last month, the Federal Government released its mid-year Economical and Fiscal Forecast with some changes in comparison to the outlook earlier this year. Treasurer Wayne Swan commented that the economy is now predicted to grow 1.5% in 2010 and 2.75% in 2011, as opposed to previous estimate of 0.5%.
Some predicted effects on our economy include:

- Lower unemployment (down to 6.75%)
- Higher growth
- Lower debt & deficit

However, the treasurer was quick to note that the economy is still operating below capacity and the hard times are far from over. The decreased worked hours during the previous financial year (especially in trades) will put a damper on the coming year, with the weakest expected GDP growth in 50 years. Although manufacturing activity has started to stir, it has not resulted in reversing the effects of recession. A long, sustained period of new production orders will be needed to stop the falling employment rate in the industry.
We will see some changes as the government attempts to control their deficit while maintaining the economic uplift:

- Reduced stimulus programs (predicted decrease in 1st Home Owners grants and withdrawal of 50% Business investment allowance)

- Increased interest rates (Westpac's chief economist Bill Evans claims the maximum rise to 4.5%, although top economists are predicting figures between 5-5.5%)

Overall, improvements will continue in the coming year, but you should continue to approach business with a conservative frame of mind. If you have maintained control the economic downturn, the increased throughput in 2010 should put your business in a favourable position for growth towards the end of next year.