FED: Govt to release latest economic outlook today

AAP General News (Australia)
12-17-1998
FED: Govt to release latest economic outlook today

CANBERRA, Dec 17 AAP - The federal government will release its latest financial outlook
today, giving the latest snapshot of the state of the Australian economy amid the Asian
financial turmoil.

Treasurer Peter Costello will unveil Treasurys mid-year economic and fiscal outlook for
1998/99, revealing the first official growth forecast for next financial year.

The figures will point to the impact of the Asian financial crisis on the local economy.

Traditionally the document updates forecasts for the current account deficit, unemployment
and employment, inflation, and the budget surplus - taking into account the impact of the
introduction of a GST.

Mr Costello has hinted the government may boost its forecast of 2.75 per cent GDP growth
for this financial year after strong figures released for the September quarter.

The update will offer a more precise picture of the expected impact of the Asian financial
crisis next year, and comes in the wake of Reserve Bank Governor Ian Macfarlanes gloomy
outlook to a parliamentary committee earlier this week.

Mr Macfarlane left the door open for an interest rate cut next year, warning the Asian
economic crisis was far from over and that growth was set to slow.

He said growth was set to slow to between 2.5 and 3.0 per cent next year while inflation
would remain subdued - posing no threat to a rate cut in 1999.

AAP rmm/jnb/de

KEYWORD: ECONOMY DAYLEAD

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