Strong GDP shows stimulus can stop: economist

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source: http://www.abc.net.au/

A leading economist says yesterday's stronger than expected economic growth figures make a reasonable case for stimulus spending to be stopped.
The economy grew by 1.2 per cent in the June quarter, which is its fastest quarterly rate of growth in three years.
The figures show the private sector is now taking over a lot of the heavy lifting in the economy from government stimulus.
ANZ's chief economist Warren Hogan has told Radio National Breakfast government stimulus could be withdrawn.
"You could argue that it should be but, you know, it's not practical. I mean Canberra's not going to really be much use in trying to constrain this economy and the way the politics is playing out now, it's going to be even less useful," he said.
"That's going to put a huge amount of pressure on the RBA to do the job. You could argue from a theoretical point of view, yes it should be stopped and, in fact, you could argue they should be restricting fiscal policy to take some of the pressure off the RBA, but it's not going to happen."
Warren Hogan also says Australia should not worry about the prospect of a double-dip recession in the United States, because economic ties are now much stronger with Asia.
Earlier this week the Reserve Bank's assistant governor Guy Debelle described the prospect of a double-dip recession as an unquantifiable risk.
Mr Hogan has told Radio National Breakfast the US is no longer as relevant to Australia's economic fortunes as China and other major Asian economies.
"It's China that's the main game. In fact, China over the next decade is going to drag the US along," he said.
"A sustained recovery for the US is going to be involving China buying US goods, so I wouldn't get too caught up.
"If the US, even if it does go into a double-dip recession, which the data might suggest it's nowhere near it, it's not that relevant to Australia. What's relevant is the outlook for the Asian region and the outlook so far is very good."

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It's China that's the main game. In fact, China over the next decade is going to drag the US along