Australia is not facing a recession but the global financial crisis will impact its economy, which has enjoyed more than a decade of strong growth, Assistant Treasurer Chris Bowen said today.
While the financial turmoil that has battered global markets and economies threatens to throw the world into a deep recession, Australia is expected to emerge from the firestorm in better shape than many countries, he said.
"If you look at all the analysis, not only by us, not only by the government and the Treasury, but also by the IMF (International Monetary Fund) and the World Bank, they indicate that Australia will continue to grow," he said.
"We will be affected, we will see this crisis of confidence in the financial markets affect the real economy, the things that we all do every day, but all the evidence is that Australia will continue to be robust and will continue to grow," he told the Fairfax Radio Network.
The IMF noted on Wednesday that while many developed economies were headed for recession, Australia's growth was predicted to be about 2.2 per cent next year, he said.
Prime Minister Kevin Rudd and Treasurer Wayne Swan have said the economy is in better shape than most, to weather the crisis, as it boasts of sound regulation and strong surpluses that are helping cushion the blows.
"I believe that the purpose of having a surplus is to make sure you've got a buffer for the tough times and the tough times have come," Rudd told reporters today.