The Australian government raised its forecasts for economic growth this year as the economy continued to show clear signs of recovery. The government expected the economy to expand 1.5% this year compared with the earlier forecasts of a contraction by 0.5% in May. On the other hand, the International Monetary Fund expected the Australian economy to grow 0.7% this year and to expand 2% next year.

Treasurer Wayne Swan said that the economy will grow faster than expected and that the budget deficit will meet forecasts as the deficit is anticipated to record A$57.7 billion in the 12 months ended June 30 compared with the earlier forecasts of A$57.6 billion.