Australian officials to cut interest rates

SYDNEY, Nov. 3 (UPI) -- The Australian Reserve Bank is expected to cut interest rates Tuesday amid a sharp decline in home prices, officials said.

The central bank's expected move follows similar actions by officials in the United States and Japan. Britain and the European Central Bank also are expected to cut interest rates this week, The Australian reported Monday.

ABN-Amro chief economist Kieran Davies said he believes the Reserve Bank will cut its cash rate by 0.5 percentage points to 5.5 per cent.

Prime Minister Kevin Rudd said the Australian economy has taken a beating this year.

"It will be tough, it will be difficult, it will be hard, it will be ugly, particularly when you look at the unfolding economic data from around the world and the beginning of a global economic recession," Rudd said.

Australian Treasurer Wayne Swan said, however, he did not expect Australia would fall into recession.

"The government does expect to see positive growth," he was quoted by the newspaper as saying.

The Age reported Monday that there is a "significant" slowing of the Australian economy compared with earlier growth forecasts.

In the last budget, the economy was forecast to grow at 2.75 percent this fiscal year and by 3 percent in 2009-10. Meanwhile, the International Monetary Fund has said Australia would grow by 2.5 percent in 2008 and by 2.2 percent in 2009.