Australia’s top central banker said that the country was in a good position to stage a recovery, although he warned growth was likely to slow in the early part of the global expansion cycle.
In remarks to the Canadian Australian Chamber of Commerce, Reserve Bank of Australia (RBA) Governor Glenn Stevens said both Australia and Canada were likely to weather the current global downturn in reasonable shape.
“There are good grounds to think that both countries should be in a relatively good position and well placed to take part in a renewed international expansion,” said Stevens.
“It is too soon to say this is beginning yet, though developments over recent months are certainly consistent with the view that a recovery will get under way towards the end of the year. That said, most observers think that the early part of any new global expansion will be characterised by pretty slow growth.”
Earlier this month, the RBA slashed its forecasts for economic growth and expects a sharp contraction this year. But it sees record-low interest rates and fiscal stimulus to generate a gradual recovery through 2010.
Canada too is in recession, although, this month its finance minister said the country’s economic decline might have bottomed.
Both countries are major exporters of commodities and have benefited from a boom in demand for industrial raw materials. – Reuters