Treasurer Wayne Swan has confirmed the economic crisis will send the federal budget into deficit however the International Monetary Fund (IMF) has endorsed a budget deficit and expressed its confidence in Australia’s ability to endure the year ahead.
Ray Brooks, IMF head of Asia-Pacific, told The Australian Financial Review today that Australia’s strong track record of prudent fiscal policy positioned it strongly to weather the looming economic challenges.
“Australia is in an enviable position on the debt front,” he said. “There are not many countries in a similar position. The responsible fiscal policy over the last 10 or 15 years has left Australia in a very strong position to react.”
The federal government is expected to announce a second stimulus package as soon as today to rejuvenate the weakening economy.
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