IMF predicts weak global growth

TREASURER Wayne Swan reiterated Australia's economic strength as the International Monetary Fund pointed to deteriorating conditions overseas and Westpac tipped further interest rate cuts on Tuesday.

In its latest world economic update, the IMF downgraded its global growth forecast for 2013 from 4.1% to 3.9%.

The IMF's update on Tuesday noted the global economy had shown "further signs of weakness" posing serious risks to the recovery from the financial crisis.

But Mr Swan was quick to point out Australia's economy was "in a league of its own".

"We have the best combination of impressive growth, low unemployment, a record investment pipeline, contained inflation and low interest rates," he said.

His statement coincided with the release of Westpac analysis of the Reserve Bank's minutes of its July 3 meeting, released on Tuesday.

Westpac chief economist Bill Evans wrote that while the the RBA remained in a "wait-and-see" frame of mind, there already was a case for further cuts to the cash rate.

Mr Evans tipped a fifth consecutive rate cut from the RBA, expecting the cash rate to fall another 75 basis points to a record low of 2.75% late this year.

"Even lower rates are likely to be needed in the first quarter of 2013 with the final cut of 25bps coming in February/March." He wrote.


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