Australia confident of faster recovery discards IMF's forecast of slow recovery
29 Apr 2009
Australian Treasurer Wayne Swan says that Australia will recover faster than International Monetary Fund's prediction that ''recovery will be slow for Australia'' in its World Economic Outlook.
Talking to ABC Radio, Swan rejected the IMF's prediction that recovery will be slow, adding, "We are in extraordinary times and in the middle of global recession. The forecasts do need to reflect that."
At the G20 finance ministers' meet in Washington, Swan said that Australia was faring better than most developed nations even though the country was facing the most difficult economic situation in 75 years.
Swan is expected to detailed forecasts for both 2009-10 and 2010-11 when the federal budget for 2009-10 is unveiled on12 May in Canberra. The budget is widely expected to show a deficit for the first time in seven years.
Swan expressed the view that the budget would see the economy bounce back at the end of the recession to above-average growth rates of nearly four per cent, subsequently followed by good economic progress, as communicated to state treasurers.
This projection is more or less in line with the 1990-92 and 1981-82 recessions, however IMF forecast a slower recovery this time round.
The IMF had predicted that Australia's economy would shrink by 1.4 per cent this year before growing by 0.6 per cent in 2010 and unemployment would rise to 7.8 per cent next year from 5.7 per cent.
He had said at the G20 summit that the government was faced with a tough task in preparing the May budget in the midst of most difficult set of circumstances, especially with the IMF predicting global economy to shrink this year.
The treasurer also said that the forecast for 2010-11 would be based on growth trends.
Australia's Reserve Bank for the first time conceded last week that the country has become a part of the global recession. The governor's admission came a day after Prime Minister Kevin Rudd and Treasurer Wayne Swan, both agreed that it was inevitable that Australia would slip into its first recession since the early 1990s. (See: Australian economy in recession: Australian central bank governor )