In this difficult climate, unemployment could rise to almost 8% by late 2010, while inflation should decelerate.
To mitigate the impact of the crisis, the authorities need to maintain the expansionary thrust of their economic policy. Monetary policy could be loosened further. The infrastructure development programme announced in the 2009-10 budget is welcome and should strengthen fiscal policy impact. To enhance future growth potential, the reform of infrastructure regulations should continue, in particular to ensure regulatory streamlining between States.
Click here to see all OECD Observer articles on Australia
See also www.oecd.org/australia
You can order the latest Economic outlook at www.oecd.org/bookshop
©OECD Observer No 274, July 2009