Australian Treasurer Wayne Swan forecast on Sunday that business investments in the country would rise to 32 per cent to a record A$158 billion for the current financial year.

Mr Swam wrote in his weekly economic note that the capital expenditure by business will increase the Australian economy's capacity. He described the economic growth of the country as exceptional, especially at a time when other western economies are hardly growing and unemployment rate is high.

He pointed out that Australia's economic grew despite the natural calamities that hit the country in the early part of 2011.

However, growth was centered on two Australian states - Western Australia and Queensland, while the other states had anaemic growth rates. WA logged a record 8.4 per cent growth and Queensland expanded by 3.5 percent, while Victoria contracted at 0.1 per cent.

However, compared to 2010, the economic expansion slowed down because WA then grew by 16.4 per cent, Queensland by 9.3 per cent and the national growth rate was 1.3 per cent.

For the third quarter of 2011, Australia registered a 1 per cent growth rate, but the Reserve Bank of Australia nevertheless cut the overnight cash rate on Dec. 6 by 25 basis points on account of the difficult financing conditions bought by Europe's credit crisis.

"There's no doubt the global instability is hitting our economy and our budget.... European leaders made progress during the week on addressing the sovereign debt crisis, but clearly the world now wants to see the talk turned into action. The global community and international financial markets need to see the full details and swift implementation of Europe's plans," Bloomberg quoted Mr Swan.

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