Fed: New figures expected to show surging economy

AAP General News (Australia)
12-13-2000
Fed: New figures expected to show surging economy

CANBERRA, Dec 13 AAP - Treasurer Peter Costello is standing by his prediction of continuing
strong growth next year, despite expectations of a downturn following new figures to be
released today.

Data to be released this morning is expected to provide a pre-Christmas boost for the
government with the economy continuing to surge ahead.

Analysts expect data for the September quarter to show annual growth topping four per
cent for three and a half years.

But it's almost certain to be the economy's last hurrah, with all the indicators now
pointing to a sharp slowing in the final months of 2000 and into 2001.

Employment has suffered its biggest downturn since the last recession, the housing
industry is in its worst downturn in 13 years and job vacancies and company profits are
falling.

The latest National Australia Bank survey does little to dispel the gloom, with business
confidence falling again in November.

However, Mr Costello last night stood by his forecast of continuing strong growth next year.

"We expect that economic growth will moderate from the very high growth rates experienced
in recent years, but that growth will remain solid this financial year," he told the Australian
Business Economists annual forecasting dinner.

While domestic spending would slow, Mr Costello said strong growth in exports would
help pick up some of the slack.

NAB chief economist Alan Oster backed Mr Costello's forecast and said his bank's survey
still indicated a slowdown in the economy was more likely than a recession, with GDP around
3.0 per cent.

That would increase the chance of an interest rate cut in coming months, although Mr
Oster said the Reserve Bank was likely to be cautious, predicting only an 0.25 per cent
cut by the middle of the year.

AAP rft/hu/de

KEYWORD: ECONOMY DAYLEAD

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