Australia stands by growth forecast amid crisis: minister
Time is GMT + 8 hours Posted: 7-Nov-2008 11:52 hrs
A pub and betting shop in Sydney. Australia's economic growth forecast of 2.0 percent this fiscal year had not been undermined by a lower projection from the International Monetary Fund, Finance Minister Lindsay Tanner said
Australia's economic growth forecast of 2.0 percent this fiscal year had not been undermined by a lower projection from the International Monetary Fund, Finance Minister Lindsay Tanner said Friday.
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The IMF delivered a negative global outlook Thursday, saying advanced economies would contract next year for the first time since World War II.
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At a press briefing in Washington, IMF economist Joerg Decressin said Australia's GDP would fall to about 1.8 percent in the financial year ending June 30, 2009.
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Tanner said the difference between the growth forecasts from Australia's Treasury Department and the IMF was "very small."
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"Forecasting is an inexact science, particularly in the current global circumstances," he told Dow Jones Newswires in an interview.
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"And the difference between 2.0 percent and 1.8 percent is very small. I don't believe it undermines the Treasury forecast."
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Tanner, a junior minister to Treasurer Wayne Swan, said the rapid evolution of the worldwide financial crisis made it difficult to predict the impact on the Australian economy.
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"No-one can be sure where international economic circumstances will move in the next 6-12 months but based on all of the available evidence, we believe that these projections are accurate," he said.
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The government has already revised its growth outlook significantly lower -- bringing it down from the 2.75 percent growth projected in the May budget.
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Tanner said the government still expected to deliver an underlying surplus for the financial year of 5.4 billion Australian dollars (3.6 billion US).
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But he would not comment on whether the administration would allow the budget to fall into deficit to provide further stimulus if the outlook deteriorated.
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The government of centre-left Labor Prime Minister Kevin Rudd last month announced a 10.4-billion-dollar economic stimulus package that will deliver one-off cash payments to the elderly and lower-income families next month. — AFP
