Australia's economy will be given one last boost as a result of the conservative government's May budget before demand is dampened by the nation's slowing housing and construction markets, an independent forecaster said on Monday.
Canberra-based Access Economics said the net impact should leave economic growth around 3.5 percent for the next year, which would not be enough to cut unemployment but not weak enough to push it up from current rates below six percent.
The forecaster said there was an underlying fear that the Australian economy would not be able to smoothly change from domestic-driven growth to export-driven growth, thus leaving economic growth wallowing for the rest of the year.
"Access Economics is less worried. Housing will be slow to weaken, and export prospects are improving now the Australian dollar looks less likely to choke off the price competitiveness of Australian product," the forecaster said in its Business Outlook.
Access also said the economy had been helped by China's demand growth, which had lifted world prices for the commodities that Australia sells.
Access said Australian gross domestic product (GDP) would grow around 3.5 percent in 2004/05 and then 2.7 percent in 2005/06.
The government handed down its budget for fiscal 2004/05 in May, forecasting a surplus of A$2.4 billion and GDP growth of 3.5 percent in 2004/05 and 2005/06.