Fed: Costello says Aust economy solid but world still a worry

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Fed: Costello says Aust economy solid but world still a worry

Treasurer PETER COSTELLO says Australia's economy is solid but there's no room forexuberance because the world economy is still in difficulty.

Mr COSTELLO's comments follow the release of official figures which show retail spendingedging up for the ninth month in a row in February.

The Australian Bureau of Statistics says retail trade climbed 0.3 per cent to $14.12billion and is up 7.1 per cent for the year.

Mr COSTELLO says there's a lot of consumer confidence in the Australian economy supportedby low interest rates and low tax rates.

But he says the international environment is still a very sticky one and will takeconsiderable care in economic management over the next 12 months.

He warns that Japan, Europe and the United States are still very weak.

Mr COSTELLO also says rising oil prices, a potential by-product of the current MiddleEast crisis, could hurt the economy.

He says the government learnt in 2001 that rising oil prices dampen consumer sentimentand slow growth.

AAP RTV jph/daw/jas/rp

KEYWORD: ECONOMY (CANBERRA)