Australia ramps up growth, jobs forecasts

Australia sharply upgraded its growth and jobs forecasts on Monday after bouncing back from the downturn but warned it was still on course for a record budget deficit.
Treasurer Wayne Swan said the economy was set to grow 1.5 percent in the current financial year, up from a 0.5 percent contraction forecast in the May budget, while unemployment would peak at a lower-than-expected 6.75 percent.
The forecasts, unveiled in the government's mid-year budget update, come a day before Australia is expected to raise interest rates for the second time in as many months following its world-leading recovery.
"What Australia has achieved is something special. We have avoided the destruction of our capital and our skills base that is usually accompanied by a sharp recession," Swan told reporters.
"That's something that all Australians can be proud of because it's something that we have done together."
However, the record budget deficit outlined in May looked set to widen slightly from 57.6 to 57.7 billion dollars (52.0 billion US), or 4.7 percent of GDP, while the economy will operate below capacity "for some time", Swan said.