AUSTRALIA is rapidly emerging from the downturn into an economic boom the Reserve Bank believes could last for years, powered by the resource industry and rapid population growth.
The bank's quarterly review of the economy, published yesterday, has sharply upgraded its short-term economic forecasts and presented a radical rethink of Australia's growth potential, The Australian reports.
It believes the economy is about to overcome the infrastructure bottlenecks that held back resource exports during the boom which preceded the financial crisis.
The Reserve Bank suggests that boom will be dwarfed by the developments to come.
The Reserve Bank has sharply upgraded its short-term outlook, with growth to average 3 per cent in 2010-11, which is slightly more optimistic than Treasury's tip of 2.75 per cent, published in the budget update released on Monday.
The bank expects the revival in the resource industry to start taking effect over the next year, with the big iron ore and coalmine firms expected to win price rises of 10 to 20 per cent in the next round of contract negotiations, and Australia's terms of trade set to start rising again.
Read more at The Australian online
