OECD predicts robust growth: [3 All-round Metro Edition]
Stapleton, John. The Australian [Canberra, A.C.T] 22 Nov 2002: 2.
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Abstract
The Paris-based organisation of developed nations forecast Australia’s economy to grow by 3.5 per cent in 2002, accelerating to 3.7 per cent in 2003. This is a slight drop from the previous OECD forecast of 3.75 per cent, but is significantly higher than the 1.5 per cent average growth predicted for other developed nations this calendar year, rising to 2.2 per cent next year.
The OECD said industrialised nations were stumbling toward a US-led recovery in late 2003 and a fall back into recession was unlikely.
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THE Organisation for Economic Co-operation and Development has given Australia the thumbs up, declaring “economic growth is projected to remain robust” despite the drought and a looming downturn in residential property.
The Paris-based organisation of developed nations forecast Australia’s economy to grow by 3.5 per cent in 2002, accelerating to 3.7 per cent in 2003. This is a slight drop from the previous OECD forecast of 3.75 per cent, but is significantly higher than the 1.5 per cent average growth predicted for other developed nations this calendar year, rising to 2.2 per cent next year.
However, Peter Costello’s office warned last night the worsening of the drought over the past two months meant the economy might be weaker and thecurrent account deficit larger than the OECD forecast.
Early this month, John Howard suggested the Australian economy would grow at close to 3 per cent this financial year — well below the 3.75 per cent forecast in the May Budget.
In its semi-annual economic outlook, the OECD said the prospects for a global economic recovery have weakened over the past six months.
In particular it noted downside risks to the global economy, uncertainty arising from volatility on the financial market and sharp fluctuations in oil prices due to geo-political tensions.
However, the OECD said industrialised nations were stumbling toward a US-led recovery in late 2003 and a fall back into recession was unlikely.
“Forward-looking indicators suggest a solid recovery may be slow to materialise,” it said.
“A broad-based economic recovery is unlikely to emerge until current uncertainties dissipate, possibly well into 2003.”
The OECD expected inflation to decline over the next 18 months.
The outlook is being driven by an expected recovery in exports in line with a forecast pick-up in the growth of Australia’s major trading partners.