Australian economy tipped to enjoy strong growth
SYDNEY, July 2 (AFP) -
Australia's economy has recovered from its downturn late last year and is expected to grow strongly during the next 12 months, according to three new surveys released here Monday.
An upbeat assessment by a leading private forecaster, Access Economics, even suggested the potential for economic "boom" in 2002, but cautions that short term risks remain, including weakness in the global economy.
"The outlook is basically good and certainly it's good because of everything that's happening in Australia at the moment," Access director Chris Richardson said Monday.
Interest rates were low, government spending high, the Australian dollar remained competitive, and the housing sector was set to rebound, Richardson said. "The risk is the world economy," he added.
Companies surveyed by the Australian Chamber of Commerce and Industry (ACCI) reported an improvement in the business climate, sales and profitability.
Expectations had improved and perceptions of the national economy were markedly better, while the level of activity in the overall condition of individual firms across Australia had turned upwards and was "on the mend," the survey showed.
"The turnaround has only just begun, the upturn remains shallow and there is still much amongst our trading partners that might yet go wrong," ACCI chief executive Mark Paterson said.
"Nevertheless, it is clear from the data that the low point of the cycle was reached during the previous quarter and the Australian economy is now on the way back up."
However, it found one area of concern was the fact that despite a series of interest rate cuts recently, the climate for investment was weak.
BIS Shrapnel said in its Economic Outlook report that the economy was expected to grow strongly over calendar year 2002 but was still weak for the remainder of this year.
Economic growth was expected to come in at around 3.3 percent for the 2002 calendar period compared to just 2.1 percent over 2001.
A rebound in economic growth over the March quarter, which saw a 1.1 percent rise following a 0.6 percent retraction in the December quarter, was mainly due to one-off factors and indicated the economy was over the worst of the downturn.
However, the report said consumer spending, which helped underpin the strong rise in the March quarter, was primarily related to borrowed, rather than saved funds. |
