Australia recorded a final budget deficit of A$22.3 billion ($15.65 billion) for the year to June 2026, equivalent to about 0.8% of gross domestic product (the economy’s total output). The result was better than the A$28.3 billion deficit forecast earlier in the year, as lower spending across welfare programs and stronger-than-expected tax receipts from businesses and pension-fund investment income improved the government’s finances. The outcome followed an A$10 billion deficit in 2024/25, ending two years of surpluses. Treasurer Jim Chalmers said fiscal pressures were intensifying despite the improvement. The government had previously forecast a A$31.5 billion deficit for 2026/27, but a global bond selloff has lifted yields and borrowing costs. The Reserve Bank of Australia is widely expected to raise interest rates for a fourth time to 4.6% on Tuesday, while unemployment has remained at 4.6%.