Fed: Costello plays down risk from higher US rates

AAP General News (Australia)
04-23-2004
Fed: Costello plays down risk from higher US rates

Treasurer PETER COSTELLO has played down the prospect of higher interest rates in the
United States and predicts Australia could keep leading the economic pack.

The latest economic report card from the International Monetary Fund says the outlook
for global growth is among the rosiest in 10 years, and Australia's prospects remain strong.

It also calls for the United States to raise interest rates, along with cutting its
current account and budget deficits.

Similar sentiment has come from US Federal Reserve chairman ALAN GREENSPAN.

Mr COSTELLO, on the eve of a visit to IMF annual meetings in Washington, says the US
has a very different starting point to Australia, with the base rate at one per cent compared
to 5.25 per cent in Australia.

He has told the ABC the US economy is now moving out of recession and it's growing,
and one would expect that in the US that interest rates will rise somewhat.

But he says the situation is different in Australia as it has not been in recession.

The IMF has also repeated warnings about a slowdown in the housing market, but Mr COSTELLO
says Australia is headed for a soft landing, not a crash.

AAP RTV kmh/wz/psm/

KEYWORD: ECONOMY (CANBERRA)

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