Worst deficit in 50 years spells banana drama (Aust economy in trouble)

[rooboy]

The current account deficit has grown to more than 7 per cent of the economy for the first time in half a century, as the nation racks up foreign debt to pay for consumers' hunger for imports.

The deficit in the last three months of 2004 totalled an estimated 7.1 per cent of gross domestic product, far larger than that which prompted the warning by the then prime minister, Paul Keating, in 1986 of Australia becoming a "banana republic".

And if not for very favourable trade prices, the deficit would have been far higher than $15.2 billion.

The shortfall is one item in a trifecta of economic and political headaches for the Government.

This morning the Reserve Bank is expected to announce one the most controversial interest rate rises in at least a decade. If economists and commentators are right, official rates will rise by a quarter of a percentage point at 9.30am, pushing the standard mortgage rate to 7.3 per cent.

Two hours later, the Bureau of Statistics is expected to confirm the economy grew by just 2 per cent or less last year - about half its trend rate over the past decade - and might have barely grown at all in the quarter to December.

http://www.smh.com.au/news/Business/Worst-deficit-in-50-years-spells-banana-drama/2005/03/01/1109546874562.html?oneclick=true

[joeybee12]

1. Hmm...and a member of the coalition of the "willing"...pretty soon

they'll pull their troops--no money. Dumbo sure knows how to pick 'em.

[republicannincompoop]

2. Spoke with an Aussie woman at the market 4-5 months ago, and

at that time, she was just thrilled with Bush: "Look how strong our Aussie dollar is" she told me.

Yeah, I told her, but against WHO???

The US dollar, and why should I think that is a good thing?

She couldn't quite understand why I wasn't like everybody else here, and thrilled with Bush.

[rooboy]

5. Never forget that Australians descend from convicts...

which means our genetic lines are filled with people who were too stupid to not get caught. As so it is with the lady you met, obviously.

[PROGRESSIVE1]

3. HOLD ON! My understanding was that the Australian Economy was...

"booming" and that's why Howard and Co got re-elected with a greater majority in parliament!

:wtf:?

[Robbien]

4. Yes, the same kind of "booming" which happened here in the states

Fuelled low interest rates, rising incomes and soaring property wealth, Australians borrowed beyond their means to buy cheap imported TVs, DVDs, clothes, toys, cars and other consumer goods.

Sound familiar?