Spending alone coming from the federal government will not shore up the economy in the immediate quarters ahead in light of the difficulties predicted this year by many economists.

Opposition Treasury Spokesman Joe Hockey is more convinced that the Australian economy will be in better position if the Reserve Bank of Australia (RBA) will implement more rate cuts this year.

Aside from government policies that will ensure the Euro crisis, which economists said could spark global recession in the current year, Hockey stressed that more efforts on the part of the RBA could strengthen the domestic economy.

"Interest rates today are comparatively high as compared to the rest of the world and the bank has tremendous capacity to move further to stimulate economic growth by reducing interest rates, and they should do that before the government starts spending," Hockey was reported as saying during a Friday talk on Melbourne Talkback Radio (MTR).

His comments were made following the projections earlier made by the International Monetary Fund (IMF), which mostly downgraded the growth prospects of major economies around the world, including that of Australia.

From its earlier estimates of 3.3 percent growth made in the third quarter last year, the IMF revised its figures this week and declared that Australia, like the rest of the world, will experience some sort of slow downs.

At most, Australia's expansion would reach three percent, a bit off from the 3.25 percent growth that the federal government and the RBA had laid out for the upcoming financial year 2012-2013, the IMF said.

However miniscule the decline would be, Opposition Leader Tony Abbott blamed Prime Minister Julia Gillard for spending too much, which he said was the government's unique way of solving Australia's economic challenges.

"The lesson of the eurozone crisis is that governments that spend too much, borrow too much and tax too much eventually cause enormous problems for their people," Abbott reminded the Prime Minister.

The government, however, viewed the Coalition stance as irresponsible, with Assistant Treasurer Mark Arbib insisting that it would be unfair to equate the Australian situation to that of Europe.

"These kinds of irresponsible comments damage confidence and make life harder for Australian businesses," Senator Arbib was reported by BigPondNews.com as saying.

Also, Federal Treasurer Wayne Swan stressed that despite the situation in Europe, which he described as "serious and dragging economic growth," the Coalition needs to assess the domestic situation in a more balanced perspective.

"I think there's just a tendency out there in our public discussion to focus far too heavily on all the risk being on the downside," Swan told the Australian Financial Review on Friday.

The general sentiment among Australian economists is that the RBA will roll out more rate reductions this year as the global situation deteriorates and economic indicators apply more pressures to the general domestic situation.

Two push backs in November and December closed the 2011 cash rate at 4.25 percent and another should come by February, economists said.

And as the IMF contradicted the RBA's 2012 growth forecast of 4.0 percent, experts said that it is likely that more cuts would be imposed this year, with many predicting that the cash rate would eventually settle at 3.25 percent by early 2013.