The International Monetary Fund is still optimistic the Australia's economic growth will be sustained by mining and other private investments pouring into the country.

The IMF said in its forecast contained in its semi-annual World Economic Outlook, Australia's losses incurred from the natural disasters will be offset by stronger private sector investment into the mining sector.

The IMF said growth will be there albeit slower because of the natural disasters that wrecked havoc in parts of Queensland and other territories.

"In Australia, flooding in key mining and agricultural regions is expected to subtract from growth in early 2011, but over the year this will be offset by stronger private investment," the Washington-based IMF said in today's report.

The IMF said the Australia's gross domestic product will increase 3 percent in 2011, half a percentage point lower than an October estimate.

NZ's recovery

The IMF, on the other hand said, although New Zealand's economy received a beating from a series of earthquakes, the reconstruction phase will give the nation a boost in the medium term.

The IMF said New Zealand's GDP will rise 0.9 percent, down from last month's prediction of 1 percent and last year's 3.2 percent, it said.

While "earthquakes will slow activity in New Zealand this year," growth will strengthen in 2012 as reconstruction of the South Island city of Christchurch intensifies.

Monetary authorities of Australia and New Zealand have implemented strategies to soften the blows of the natural disasters and shore up confidence among consumers.

Australia's central bank halted further interest rate increases, while New Zealand cut borrowing costs to a record last month.