Despite the apparently darker days ahead for the global financial situation due to the impact of the European debt crisis, Treasurer Wayne Swan is confident that Australia would rise above the crisis.

The proof of his confidence is his Tuesday forecast of a 3.25 per cent growth rates for the economy in 2011 and 2012 contained in the Mid-Year Economic and Fiscal Outlook.

However, Mr Swan admits that economic forecasting is far from a perfect science.

"What the Treasury does is makes its best judgment about the prospect for the year ahead, based on where we are at this point in time," he told ABC.

Mr Swan increased his forecast of a budget deficit to $37.1 billion from May's outlook of $14.5 billion deficit. However, he is confident that Labor could keep its promise to Australians to achieve a surplus in 2012-13, but at a smaller $1.5 billion.

Labor unions have called on the Treasury to abandon the budget surplus promise in favor of protecting jobs.

"We've taken the middle path between those who say we don't need a surplus, and those who say we should take a really big axe to spending," Mr Swan told The Australian,

Although most countries could only dream of growing in the next quarters given the current trends, Australia could expect some expansion, he said. To achieve that, the government would rely on the newly approved carbon tax, shift timing of payments and reduce expenditures.

The opposition described the anticipated surplus as wafer-thin, but Mr Swan said it is modest.

"The weakness of the numbers that we've seen today - the general shakiness inevitable under these circumstances of the forecasts on which that wafer-thin surplus is based - makes me think that if he really is air dinkum about delivering it, today's crisis mini-budget will be the first of many," The Australian quoted Opposition leader Tony Abbott.

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