Fed: Aussie trading partners will grow strongly: World Bank

AAP General News (Australia)
04-07-2010
Fed: Aussie trading partners will grow strongly: World Bank

By Stephen Johnson

CANBERRA, April 7 AAP - One of Australia's biggest trading partners will help the economies
of East Asia grow more rapidly than previously expected in 2010, the World Bank says.

The healthy forecast comes as Treasurer Wayne Swan prepares to fly to Washington in
two weeks for the next Group of 20 meeting of finance ministers.

The World Bank says the economies of East Asia, led by China, will grow by 8.7 per
cent in 2010 - almost one percentage point higher than its prediction of six months ago.

"The developing countries of East Asia, led by China, are recovering well from the
global economic crisis," it says.

"But how the region's leaders handle the next round of important economic decisions
will determine the strength and speed of future growth."

China, a key buyer of Australian resources and the nation's second biggest trading
partner, is a member of the G20.

Mr Swan said the next G20 meeting, scheduled to be held in Washington on April 22 and
23, would focus on sustainable global growth in the aftermath of the global financial
malaise.

"Finance ministers will also continue work on financial regulation and international
financial institution reform, along with a number of other issues," he said in a statement.

This will be Mr Swan's first attendance at a G20 summit since November, when his counterparts
met in Scotland.

While the government plans to wind back its stimulus in 2010, the treasurer pointed
to an OECD report released on Wednesday urging policy makers to be cautious.

"Despite some encouraging signs on activity, the fragility of the recovery, a frail
labour market and possible headwinds coming from financial markets underscore the need
for caution in the removal of policy support," the OECD's interim assessment said.

In Australia stimulus is being withdrawn faster than most other first-world economies,
and ahead of the timetable set by the OECD for developed nations, Mr Swan said.

Treasury estimates the withdrawal of stimulus measures would detract about one percentage
point from Australian economic growth in 2010.

AAP saj/apm

KEYWORD: ECONOMY SWAN

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