Western Australia was well placed to weather any global or national economic storm in the short term, Treasurer Eric Ripper said today.
Referring to the latest forecasts by Access Economics, which rated WA's short-term economic prospects as ‘superb’, Mr Ripper said the mining boom in the State’s north was providing some cushioning from a global economic downturn.
The forecaster predicts that the State’s economic growth rate will remain the highest in the country, at 5.9 per cent for 2008-09 and 5.3 per cent for 2009-10.
These growth rates compare with Access Economics' forecasts for the Australian economy of 3.3 per cent growth in 2008-09 and 3.5 per cent growth in 2009-10.
However, the Minister said the State must prepare for an eventual slowing down of the economy, particularly if Asian economies such as China, started to cool off.
“Access noted that any slowdown in growth in Asia in 2009 or 2010 could bite hard for WA, detracting from our boom,” he said.
“As Access pointed out, there are risks ahead for China, but they are more likely to make an impact in 2009 and beyond, rather than 2008.”
Mr Ripper said the report also offered a caution about iron ore prices, with increases in global supply pointing to a potential easing in iron ore prices for the next round of negotiated prices (for the Japanese financial year starting April 1, 2009). An even bigger fall in iron ore prices was possible for the year after that.
The Minister said Access also noted that engineering construction work would give the State a handy bumper bar should the resources boom slow sooner or faster than expected.
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