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Australia Ignores U.S. Financial Weakness

Australia has shrugged off a weak U.S. economy in the past and will be able to do so again, Treasurer Peter Costello says. Mr. Costello, speaking in Perth on Wednesday, said that the American economy was the biggest in the world and that if it shrank then the global economy would be severely weakened. There are growing concerns about the strength of the American economy, due in part to the growing U.S. budget deficit, an overheating real estate market and the prospect of higher interest rates.

"The US economy is the largest economy in the world, it governs global production and it is important for the global economy that the US continue to grow," Costello said. "If the US should weaken then the global economy will weaken. Fortunately Australia has been able to shrug off US economic weakness in the past and I believe we can do it in the future.

"But it is easier to run a strong Australian economy on a strong global economy than to run a strong Australian economy in a weak global economy so we would like to see the US strong. We would like to see global growth strong," Costello concluded.