Fed: Modest recovery dependent on stimulus package: Swan

AAP General News (Australia)
08-07-2009
Fed: Modest recovery dependent on stimulus package: Swan

BRISBANE, Aug 7 AAP - Treasurer Wayne Swan says the Reserve Bank of Australia's (RBA)
forecast of a modest recovery is based on the full implementation of the government's
stimulus package.

In its monetary policy statement released on Friday, the central bank forecast gross
domestic product (GDP) to rise by 0.5 per cent over the year before lifting to one per
cent in the year to June 2010.

In its last statement, the RBA forecast GDP to contract by one per cent in calendar
2009 and grow by half a per cent in the year ended June 2010.

Mr Swan said the improved outlook was dependent on the government carrying out its
stimulus package in full.

"The Reserve Bank points to substantial headwinds in the global economy," Mr Swan told
reporters in Brisbane.

"But the one thing we can see here in the Reserve Bank forecasts is that they are predicated
on a modest recovery and economic stimulus being fully implemented."

Australia would still see higher unemployment and lower business investment, he said.

But he said the RBA saw no risk associated with Australia's inflationary outlook.

AAP jmm/pjo/jfm/mn

KEYWORD: RBA SWAN

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