Fed: Costello predicts US economy will take time to recover

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Fed: Costello predicts US economy will take time to recover

CANBERRA, April 27 AAP - Treasurer Peter Costello today predicted it would take sometime before the United States economy enjoyed strong economic growth.

He said until the US economy showed signs of strengthening the worst of the globaleconomic weakness would not be over.

Mr Costello was responding to an Organisation for Economic Cooperation and Development(OECD) report released last week which showed the world was experiencing an economic recovery.

"It would be good news if the world economy does pick up.

"It's been very weak and I have the feeling that the US economy has some way to gobefore it bounces back to stronger growth," he told ABC television.

"Japan, as we know, is very weak, Europe is continuing to disappoint.

"The good news is, with the war over and the oil price lower than its been, the conditionsare being laid.

"But people are going to watch the American economy pretty carefully to see whetherwe can see strengthening of growth in that US economy before we'll proclaim the worstof it over."

Mr Costello would not confirm the OECD's prediction that Australia's growth rate wouldclimb to 3.8 per cent in 2004.

But he said Australia remained one of the strongest growing economies in the worlddespite being hit by drought.

"We not only have a weak world economy to cope with but we've just come through theworst drought in a century.

"And although it looks like in many areas the drought is breaking, there's still someareas where it hasn't, so we've had the added difficulty of bad domestic conditions,"

Mr Costello said.

"Now having said that, we're still leading Europe and America and Japan; so we're stillone of the strongest growing economies in the world and that's testament to the resilienceof Australia.

"But I've got to say both externally and internally it's been a pretty tough year."

AAP sm/cjh/de

KEYWORD: ECONOMY