Economy tipped to enter new Golden Age

One of Australia’s leading economic forecasters has predicted a new golden age of growth for the economy as the problems of worker shortages and production bottlenecks are solved amid a continuing boom in demand for commodities.

Canberra-based consultancy Access Economics predicts Australia’s gross domestic product will soar 4.6 per cent in 2007, compared with just 2.9 per cent this year, representing the strongest annual growth rate since 1997-98.

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But the forecaster also warned of the interest rate rise to contain inflation, which is forecast to flirt with 3 per cent before moving lower as supply catches up with demand.

The interest rate rise after the Reserve Bank of Australia at its November 7 board meeting hinged largely on recent inflation figures, which showed underlying price pressures in the economy remain strong.

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