Australia’s economic growth would continue to benefit from the expansion in the emerging markets
despite recent events in Japan and north Africa, Treasurer Wayne Swan says.
Mr Swan said the global economy would prosper overall for the next two years according to the latest report from the International Monetary Fund (IMF).
“The IMF’s April 2011 World Economic Outlook released overnight says emerging economies will continue to underpin global growth, forecast at 4.4 per cent this year and 4.5 per cent in 2012, but warns of key downside risks to the outlook,” Mr Swan said in a statement on Tuesday.
“The tragic events in Japan, political instability in North Africa and the Middle East, and persisting sovereign debt concerns in Europe continue to cloud the global economic horizon.”
Mr Swan said these global risks as well as the recent natural disasters locally added to the challenges for the Australian economy.
“Our devastating summer of natural disasters means that Australia’s economic growth will be impacted in the short term, as will the Budget from reconstruction spending and lower tax receipts,” he said.
Treasury’s analysis indicates that the combined impact of natural disasters at home and abroad could cut Australia’s economic growth by up to 0.75 of a percentage point to an annual rate of 2.5 per cent in 2010-11, Mr Swan said.
But he said the downgrade in the growth forecasts would only be for a short time with the economy expected to pick up following the natural disasters.
“The IMF projects growth for the Australian economy of 3.0 per cent this calendar year and 3.5 per cent in 2012.”
Mr Swan departs for the US on Tuesday to attend the Group of 20 Finance Ministers’ meeting, the IMF and World Bank spring meetings in Washington later this week.
He said he would also have meetings with senior financial executives in New York.