10 May 2000

For the tenth year in succession, Australia's national economy is heading for expansion although, according to the latest annual budget, growth will decelerate. Treasurer Peter Costello, who presented the budget yesterday, expects the economy to grow 3.75% in the year to June 30 2001, compared with an estimated expansion of 4.25% in the current fiscal. "Australia's economic prospects are strong" with the jobless rate "around its lowest levels in a decade" said Costello, adding that the nation is set to post "the lowest unemployment rates in a quarter of a century."

Other budget forecasts were ...

*Consumer prices to rise 5.75%, partly due to the new goods-and-services tax, compared with an anticipated increase of 2.5% this year.

*Unemployment to fall to an average of 6.5% next year compared with an expected rate of 7% this year.

*Wage growth to pick up next year to 4.25% from 3% during the current year. [However, wage-growth forecast is at risk from a possible shortage of skilled labor as the jobless rate falls.]

Sourced from: Wall Street Journal