Melbourne: India has become one of the fastest growing export markets of Australia and is expected to continue posting impressive rates of growth, Australian Prime Minister Kevin Rudd said on Monday, January 21, while outlining a five-point plan to combat inflation.
In his first major economic policy speech since taking over late last year, the Prime Minister described inflation as the “most pressing economic challenge Australia is facing and called the problem as one his administration “inherited” from the previous John Howard government.
Rudd noted that the downturn in the economic outlook in the US, Europe and Japan comes as strong growth in the Asia-Pacific region is continuing to drive demand for Australia’s rich mineral and energy resources.
“Over coming years, developments in China will increasingly shape both global and Australian economic conditions,” he said.
“The Indian economy has become one of our fastest growing export markets and is expected to continue to post impressive rates of economic growth. Combined, China and India accounted for around 40% of Australia’s export value growth in 2006-07,” Rudd said.
A key component of his inflation-fighting plan in the speech was to cut government spending to produce budget surpluses of 1.5% of gross domestic product (GDP), larger than the 1.0% target of the previous government.
The government would also examine options for providing incentives to encourage private savings and for tackling chronic skills shortages in the economy, he said.