Rising numbers of Canberrans are expected to see the territory's economy continue to grow, despite surging inflation placing stress on confidence.
The ACT's budget outlines an expectation the region's gross state product is poised to grow 3 per cent in 2021-22.
This rise is primarily being fuelled by larger than expected population boosts, which were outlined by the ABS's most recent census data. The census showed Canberra led the nation in population growth and rose at a rate of 2.4 per cent over the past five years.
Increases in employment, wages and infrastructure investment are also causing the rise and marks more than three decades of consecutive positive growth in the ACT.
The ACT government outlined the territory was in a better position to whether the oncoming headwinds to the national economy due to a more stable energy market.
"While considerable risks remain with the economic outlook, the ACT is better placed than most jurisdictions, with inflation not expected to grow as fast as in other jurisdictions due to better outcomes for energy and utility prices that have safeguarded us against high energy cost being seen elsewhere in Australia and around the world," an excerpt of the budget reads.
The state's GSP number sits below the national real gross domestic product forecast of 3.75 per cent for 2021-22. This is a revision down from pre-election expectation of 4.25 per cent.
GSP for the ACT is expected to grow 3 per cent for 2022-23, a reduction of 0.25 per cent from prior forecasts.
Projections of further population growth are hinged on the return of migrants following the reopening of international borders and touted by the ACT government to address ongoing labour shortages.
Supply constraints have also been flagged as an ongoing economic risk and expectations further interest rate hikes by the Reserve Bank will constrain demand.
"There is the ongoing and uncertain nature of the pandemic and the continuing shocks of geopolitical developments," it reads within the ACT's economic outlook.
Budget papers do outline a deterioration in consumer confidence as a result of inflation driving up the cost of living.
"Consumer confidence has declined significantly since its April 2021 peak," it says.
"Since the June quarter 2022, this decline in confidence has been driven by expectations of further rises in inflation, and associated rises in interest rates."
Public investment is expected to remain at elevated levels through 2022-23, while business investment over the coming budget year will grow by approximately 4 per cent.
In its forecasts, the ACT anticipates lockdowns in China will end by 2023 and would see a return of international students to Canberra, which would support net export numbers over the coming years.
Canberra's housing market is also set to face some uncertainties, despite May 2022 residential building approval levels sitting at 15.8 per cent compared to the prior year.
Tightening lending conditions are expected to place downward pressure on demand.
However, stronger wage growth, migration and lower rental rental vacancies are set to reverse some of the downside risks.
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