Fed: Costello still upbeat about Australian economy

AAP General News (Australia)
02-14-2001
Fed: Costello still upbeat about Australian economy

MELBOURNE, Feb 14 AAP - Australia would be able to weather the slowdown in the US economy
as it had done during the Asian crisis, federal Treasurer Peter Costello said today.

Mr Costello told the Melbourne Press Club that growth was expected to slow down with
a fall off in consumer demand.

But he said Australia had a couple of things going for it which would see it through,
while the US was hampered by other problems, such as the strong greenback.

"The United States exchange rate has made its export markets more difficult," he said.

"Our exports have become more competitive and growth could well switch from consumption
into exports.

"The second thing is we have not followed the asset inflation on equity markets in
the US, much to the chagrin of many Australian companies, meaning that the correction
is this country has not been as great and the loss of asset wealth proportionately smaller."

He said Australia had had external challenges before, such as the Asian financial crisis,
and Australia alone in this region had weathered it.

"The US slowdown will be a challenge, but with strong economic policy we can weather
it," he said.

"The important thing is to fix our economic policy making in the medium and long term."

Mr Costello said Australia had come through a period of exceptional growth, where the
economy had grown above four per cent for the last 14 quarters.

"There is no other comparable period of growth like it since we've been taking quarterly
national accounts back in the `50s," he said.

"We expect that the driver of that growth, which has been consumer demand, will come
off. We've been forecasting it for some time."

AAP st/sp/jlw/br

KEYWORD: ECONOMY (WITH PICS)

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