Jan. 27 (Bloomberg) -- Australia’s economic recovery will accelerate this year and next, helped by China’s demand for raw materials including iron ore and a rebound in consumer confidence, Access Economics says.
Gross domestic product will rise 2.5 percent this year and 3.5 percent in 2011, after gaining 0.9 percent last year, the research company said in a report released in Canberra today.
The nation’s economy was one of the few to skirt the global recession in 2009, as Prime Minister Kevin Rudd’s government distributed A$20 billion ($18 billion) in cash to households and Asian demand for exports rebounded. Signs that the economy will strengthen further this year prompted central bank policy makers to raise borrowing costs last month by a quarter-percentage point to 3.75 percent, the third move in as many months.
“Recovery should continue through 2010 and 2011,” Access said in the report. While government spending will slow and consumers may be hurt by higher borrowing costs, housing construction will “lift notably” amid a surge in population growth.
By 2011, engineering construction will also add to growth, it said.
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