A leading economist has suggested that the Reserve Bank of Australia and the Government need to continue to work together to lift the economy out of recession, believing if they do so, the recession will be less damaging than the previous.
Westpac chief economist Bill Evans said that world growth is weaker compared to the early 90’s and the central bank and government still have more work to do.
”It would be a mistake for the monetary and fiscal authorities to assume that enough work has been done given the extremely dangerous global economic environment.”
The latest Westpac-Melbourne Institute leading index of economic activity indicated that the economy contracted by 5.1 per cent in February, well below its long-term trend of 2.9 per cent growth.
Westpac has forecast that the economy will contract by a further one percent in 2009.
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