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Jan 13, 2011

World Bank expects Australian GDP growth of 3.2% in 2011 and 3.8% in 2012

The World Bank expects Australia to grow more rapidly this year than global high income countries as a whole. The Bank's glo

Richard Farmer

Crikey political commentator

The World Bank expects Australia to grow more rapidly this year than global high income countries as a whole. The Bank's global economic forecast released today says real GDP is estimated to have expanded by 3.9 percent in 2010, once again led by strong domestic demand in developing countries. Restructuring and right-sizing in the banking and construction sectors, combined with necessary fiscal and household consolidation, will continue to drag on growth in many high-income economies and developing Europe and Central Asian countries. At the same time, growth is projected to slow in other developing countries due to emerging capacity constraints. Overall global GDP is expected to grow 3.3 percent in 2011, before picking up to 3.6 percent in 2012 as the drag on activity from restructuring in high-income countries eases somewhat. The bank's predictions for Australia are summarised in the following table:

13-01-2011 worldbankforecastforaustralia

The World Bank forecast says that strong growth of domestic demand in developing-country will continue to lead the world economy. Developing countries domestic demand is playing a major role in the recovery, representing 46 percent of global growth in 2010. GDP in low- and middle-income countries expanded 7 percent during 2010 (5.2 percent excluding India and China) and is projected to increase 6.0 and 6.1 percent in 2011 and 2012. As such it will continue to outstrip growth in the high-income countries (2.8, 2.4 and 2.7 percent in 2010, 2011 and 2012).

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