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SYDNEY - Eminent economists have made a bleak assessment of Australia's economy, predicting that up to 250,000 people could lose their jobs and growth will slow to a crawl.
The Age newspaper's half-yearly economic survey predicts unemployment will hit 6.4 per cent by the end of this year, more than a percentage point above the official Treasury forecast, and growth will slow to 0.7 per cent.
The budget, under strain from spending to maintain a floor under household consumption and business investment, will slide into deficit to the tune of A$1.4 billion ($1.7 billion) this financial year and A$8.5 billion in 2009-10.
Federal Treasurer Wayne Swan said the Government would do whatever it took to "pump-prime" the economy, including borrowing or further stimulus if necessary.
"We will do everything within our power to protect growth, households and business investment," he said.
"The Prime Minister and I have said all options are on the table."
While declining to comment specifically on the forecasts from the 21 economists, the Treasurer said Australia was facing a challenging outlook.
The survey suggests that Australia is likely to avoid the recession already underway in the United States and Europe. But the slowdown will provide plenty of pain for households, with unemployment forecasts from some market economists ranging as high as 9 per cent in 2010.
- AAP