24 Feb 2010

It is expected that the Australian economy will experience a boom later this decade according to a leading economic forecaster. At the same time it is expected that interest rates will rise by another two percentage points over the next three to four years.

"We are now well and truly into recovery from what turned out to be a modest downturn - and not a recession as other forecasters predicted at this time last year," BIS Shrapel senior economist Richard Robinson said in the Long Term Forecast Report February 2010.

Gross domestic product is expected to rise 2.7 per cent in the 12 months through June 2010, 3 per cent in fiscal 2011 and 3.8 per cent the following two years.

"Growth will pick up speed over the next two years and build into a boom later this decade," the BIS Shrapnel report said.

Repayments on an average mortgage of $300,000 would increase by around $450 a month if the standard variable rate rose to nine per cent from current rates of around 6.7 per cent.

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