CANBERRA, Dec. 18 (Xinhua) -- Australia's federal budget will not return to balance for 10 years, Treasurer Jim Chalmers has revealed in a major economic update.

Chalmers and Finance Minister Katy Gallagher on Wednesday handed down the annual Mid-Year Economic and Fiscal Outlook (MYEFO), revealing an updated projected budget deficit for the current 2024-25 financial year of 26.9 billion Australian dollars (17.02 billion U.S. dollars).

It marks a slight decline from the 28.3 billion AUD deficit forecast in the federal budget for 2024-25 delivered by Chalmers in May.

However, the deficits in the following three years are now projected to total 143.9 billion AUD, an increase of 21.8 billion AUD from May's forecast.

The update predicts that the budget will not return to balance until 2034-25.

It forecasts that Australia's gross debt will peak at 36.7 percent of the country's gross domestic product (GDP) in 2027, up from 34.0 percent in 2024-25, before declining to 31.4 percent of GDP by 2035.

Australia's economy is expected to grow by 1.75 percent in 2024-25, up from 1.4 percent in 2023-24, and by 2.25 percent in 2025-26, MYEFO said.

May's budget predicted economic growth of 1.75 percent in 2023-24 and 2.0 percent in 2024-25.

Wages are forecast to grow by 3.0 percent in 2024-25, down from the 3.25 percent forecast in May.

"We know that growth in our economy has slowed more than we expected at the budget due to a combination of higher interest rates, cost-of-living pressures and global uncertainty," Chalmers and Gallagher said in a joint statement.

"The Australian economy is on track for a soft landing, with the economy continuing to grow."

The MYEFO included 5.5 billion AUD in unannounced government spending, which is expected to be detailed in the lead-up to the 2025 general election that must be held by May. (1 Australian dollar equals 0.63 U.S. dollars) Enditem

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