Australian government welcomes International Monetary Fund endorsement of stimulus spending

Australian welcomes IMF policy endorsement

CANBERRA, Australia — The government, criticized for sinking Australia too deep into debt with spending to boost the economy, on Thursday welcomed an International Monetary Fund endorsement of its quick response to the global economic slump.

The IMF said Wednesday the downturn in Australia “has been milder than in most advanced countries.”

“This is because of strong commodity exports, a flexible exchange rate, a healthy banking sector and a timely and significant macro policy response,” the IMF said.

It predicted a 0.5 percent contraction of the 1.1 trillion Australian dollar ($900 billion) economy in 2009 followed by 1.5 percent growth next year.

Treasurer Wayne Swan told the Parliament the report was a “complete repudiation” of opposition lawmakers who opposed the size of the government’s multibillion dollar economic stimulus packages.

The government plans a budget deficit of AU$58 billion in the current fiscal year and AU$188 billion over four years as it ramps up infrastructure spending designed to stimulate the economy.

“We welcome the quick implementation of targeted and temporary fiscal stimulus,” the IMF said, adding that it “provides a sizable boost” to domestic demand this year and in 2010.