Forecasts get blacker

Australian Treasurer Wayne Swan said economic growth and revenue forecasts in the May 12 Budget would be "substantially worse" than outlined in February because of the recession.

He said the Budget would be affected by downturns in major trading partners like China as demand slowed for exports from the world's biggest producer of coal, iron ore and wool.

"The global recession and deep downturns from our major trading partners make it certain that our own forecasts for growth and revenue in the Budget will be substantially worse than in UEFO," he said, referring to the updated economic and fiscal outlook.

Economic growth in China was the slowest in a decade in the first quarter. It adds to evidence Australia's economy will slide into its first recession since 1991 amid the global slump.

On February 3 the Government said the economy would grow 0.75 per cent in 2009-10 with an A$42 billion ($53 billion) stimulus package.

- BLOOMBERG