By Paritosh Parasher, IANS,
Melbourne : India and China would continue to drive the Australian economy for decades to come, Warren McKibbin, a member of Reserve Bank of Australia, has reiterated while addressing an economics conference in Sydney Monday.
Australia is the only developed economy which has defied the ongoing global downturn, thanks mainly to the two most populous countries of the world, he said. While China is the largest trading partner of Australia, India now occupies the fourth spot on the ladder.
Australia’s central bank had earlier attributed the country’s resilience to global recession to the resources boom driven primarily by the major Asian economies.
“Asia is at the forefront of the global recovery,” a RBA growth forecast released in November read.
“Growth in China and India has been particularly strong,” the RBA document added while lifting its growth forecast for 2009 from 0.5 percent to 1.75 percent and raised estimates for growth in the 12 months to fourth-quarter 2010 from 2.25 percent to 3.25 percent.
There has been a spurt in the investment in the resources sector in Australia with the LNG (liquefied natural gas) sector expanding more exponentially than the others. The insatiable demand for resources in Asia has not only cushioned Australia against the global economic downturn but has also prompted the bank to lift interest rates.
Warren McKibbin reiterated once again on Monday that “…monetary policy in Australia would have to continue to play a major role in restraining domestic demand”.
(Paritosh Parasher can be contacted at [email protected])