Economic outlook – a resilient NSW economy
Since the 2022-23 Budget, the NSW economy has grown faster than expected despite global headwinds, high inflation and rising interest rates. Households have continued to spend, aided by robust employment and solid savings buffers.
The labour market remains strong with the participation rate close to record highs and the unemployment rate around its lowest level in nearly 50 years. New South Wales’ female participation rate reached its highest monthly rate on record at 62.3 per cent in November 2022. The NSW Government continues to support opportunities to boost women’s labour force participation through initiatives introduced in the 2022-23 Budget’s Women’s Opportunity Statement.
Inflation is expected to ease in 2023 as commodity prices moderate, supply chain pressures resolve and household spending slows. The implementation of the National Energy Price Relief Plan is expected to put downward pressure on rising energy bills, further helping to constrain inflationary pressures.
Economic growth is expected to slow in 2023-24, in part due to the impact of higher interest rates and cost pressures on households and businesses. However, the strong labour market and large build-up of net household savings over the course of the pandemic is anticipated to underpin continued growth, albeit at more moderate rates.
