Australian economists predict bleak economy in 2009

Special Report:Global Financial Crisis

CANBERRA, Jan. 3 (Chinese media) -- A group of eminent economists have given a bleak new assessment of Australia's economy in 2009, predicting that up to 250,000 people could lose their jobs and growth will slow to a crawl, a newspaper said Saturday.

The Age newspaper's half-yearly economic survey predicted unemployment will rise to 6.4 percent by the end of this year from4.4 percent in last October, more than a percentage point above the official Treasury forecast, and growth will slow to 0.7 percent.

The survey suggested that on current information, Australia is likely to avoid the recession already underway in the United States and Europe. But the slowdown will provide plenty of pain for households, with unemployment forecasts from some market economists ranging as high as nine per cent in 2010.

The budget, under strain from spending to maintain a floor under household consumption and business investment, will slide into deficit to the tune of 1.4 billion Australian dollars (966 million U.S. dollars) this financial year and 8.5 billion Australian dollars (586 million U.S. dollars) in 2009-10.

In an interview with the Age newspaper, Treasurer Wayne Swan said the government will do whatever it takes to "pump-prime" the economy, including borrowing or further stimulus if necessary.

"We will do everything within our power to protect growth, households and business investment," he said.