Australia Can Ride Out Turbulence, Says Treasurer

MELBOURNE, Jan 22 (Bernama) — Australia’s Federal Treasurer Wayne Swan says the country is well placed to ride out the turbulence in global financial markets.

The Australian share market plummeted more than six per cent on Tuesday — extending the run of losses to 12 trading days — on fears of a US recession hitting global economic growth.

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Swan said world markets continue to experience volatility as a result of the US subprime crisis.

“Uncertainty remains about the extent of losses associated with the US subprime fallout, which is likely to result in some degree of volatility over the period ahead,” he said in a statement.

“This has resulted in recent falls in the local share market.”

“However, I note that we are well placed to ride out the turbulence that flows from events in the United States even though we are not immune from it,” Swan said

“The prospects for ongoing growth in Asia and the developing markets are assisting us to withstand the fallout occurring elsewhere,” he said.

Meanwhile, opposition treasury spokesman Malcolm Turnbull said the case for the Reserve Bank holding off on any move to increase interest rates was growing stronger each day.

Turnbull said the slump on world stock markets would have a real economic impact that would not be good for the nation’s economy.