Australia growth, job figures to top forecasts - Swan

SYDNEY, Nov 1 - Australia will release better-than-forecast growth and unemployment figures on Monday in its mid-year economic review, Treasurer Wayne Swan said on Sunday.

But he warned that Australia's budget had taken a hit from the global financial crisis, with business investment and Australia's terms of trade among areas hardest hit.

"Tomorrow in Canberra I will release the Mid-Year Economic and Fiscal Outlook, which will update our forecasts for the coming years," Swan said in a statement on his website (www.treasurer.gov.au).

"Because of the efforts of Australians, combined with the actions taken by the government and the Reserve Bank, our forecasts for growth and unemployment will be better," he said.

"Unfortunately, the budget has still taken a big hit from the global recession..."

Australia's economy narrowly avoid recession this year due to government stimulus spending and commodity trade with China.

The government's May budget forecast gross domestic product growth of -0.5 percent for 2009/10.

Unemployment will be nowhere near as bad as this year's official 8.5 percent forecast and with treasury tipping a revised jobless peak of around 7 percent next year.

In the May budget, the government forecast budget deficits totalling A$184 billion over the next four years.

Australia's central bank lifted interest rates by 25 points to 3.25 percent in October, making Australia the first G20 country to increase rates since the start of the global downturn.

The central bank will meet next Tuesday and is expected to raise its cash rate for a second straight month in another step towards normalising monetary policy settings, having already shifted its focus to inflation from supporting growth.

The big question is whether it will go for a modest quarter-of-a-percentage point rate increase in the 3.25 percent cash rate, or opt for a more aggressive rise of 50 basis points.