Australia well placed to weather financial storm, victory for Australia’s richest man: Economy roundup

After a week of bad news, the International Monetary Fund gave us a ray of sunshine overnight with the release of its regular assessment of global economies. The IMF says our economy is in good shape.

After a week of bad news, the International Monetary Fund gave us a ray of sunshine overnight with the release of its regular assessment of global economies. The IMF says our economy is in good shape.

“The sound macro-economic framework should permit Australia to weather the global downturn and contain inflationary pressures,” the IMF said in its report.

The IMF also said that the Reserve Bank’s decision to ease monetary policy in the face of financial market turmoil was welcome.

Not surprisingly, Federal Treasurer Wayne Swan seized on the comments. “The Government has repeatedly said that while Australia is not immune from global economic turbulence, we are well placed to withstand the fall-out and today’s IMF report is further evidence of that resilience.”

The IMF’s report must have cheered Australian investors, who have pushed up the value of the local sharemarket this morning. The benchmark S&P/ASX200 index rose 0.6% or 28.6 points to be at 4952.1 points at 11:30am AEST.

The rise is something of a surprise to market watchers, who feared the Australian market could slide today after Wall Street dropped 1.5% overnight.

The haggling over US Treasury Secretary Henry Paulson’s $US700 billion bale-out continues, with Republican and Democrat legislators becoming increasingly concerned about the detail of the plan. Paulson wants the package approved as quickly as possible, arguing delays will create uncertainty and further spook the market.

In local corporate news, Australia’s richest man Andrew Forrest has won an important victory against mining giants BHP Billiton and Rio Tinto. The High Court says the mining companies must allow Forrest’s Fortescue Metals Group to have access to rail lines to allow it to move iron ore to the nearest port.

Fortescue shares jumped 7% on the news, but are now trading 0.6% lower.

Meanwhile, Qantas says it will delay the partial float of its frequent flyers business as market volatility would make a float difficult at this time.