Good start for Govt.

Press, 16 July 1987, Page 11

Good start for Govt.

NZPA-Reuter Sydney Australia’s balance of payments deficit, a key economic barometer, has narrowed, giving a good start to the Labour Party Government elected last Saturday for a record third term. Official statistics showed that the current account deficit fell to sAustBB6 million ($1045 million) in June from sAust94s million ($lll5 million) the previous month. The deficit for the whole of 1986/87 ending in June was sAustl3.43 billion ($15.84 billion), a fall of sAustl.32 billion ($1.55 billion) forecast by the Treasurer, Paul Keat-

ing, when he presented the budget last August. ,

Economists said the figures were highly encouraging for the Prime Minister, Bob Hawke, who forecast continued improvement in the economy before Saturday’s elections. The Australian dollar maintained its steady tone around 70.41 U.S. cents and there was no immediate movement in the interest rate, reflecting market confidence, they said.

Financial analysts said the Australian currency was expected to hold its ground in the coming months although the balance of payments deficit

could edge up. Citibank, in its latest bulletin, said Australia should accelerate repayment of its overseas debt as the short-term outlook for its economy was good. "Australia is enjoying a period of respite from falling commodity prices. No-one knows how long this will last,” it said. “This period must be seized to accelerate the defensive repayment of debt — the risk is that at some stage over the next two to three years, the world commodity cycle will move into recession, with alarming consequences for commodity prices and Australia’s financial markets,” it said.