Economy will be volatile in Australia next year

08:05, December 20, 2010      

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Australia's economic recovery will be volatile as Europe and the United States struggled in the aftermath of the global financial crisis, said a major banker of Australia.

ANZ Banking Group chairman John Morschel warns that while the pace of recovery would be faster in Australia, it was likely to experience volatility as the U.S. and Europe work through hardships like weakening economy and excessive debt level.

"This includes potential volatility in our funding costs," Morshel said at a meeting held in Adelaide during the weekend.

"Although the eurozone seems set to survive, confidence in the EU as a political union continues to erode," he said, "European banks will need to continue to shore up their balance sheets."

He expected Asia, excluding Japan, to grow at around eight percent in 2011, compared to less than 2.5 percent in the U.S. and Europe.

"Australia is expected to continue to perform well and in New Zealand the recovery is gathering momentum," he said.

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