The World Bank has picked on Australia for its over-dependence on its resource exports to China, which could eventually hamper growth in the Asia-Pacific Region to 7.6 per cent this year.

In its twice yearly update of economic forecasts for the Asia-Pacific Region, released on Wednesday, the World Bank had said that across the region growth is expected to slow to 7.6 per cent in 2012, down from 8.2 per cent in 2011 and nearly 10 per cent in 2010.

World Bank East Asia chief economist Bert Hofman says that commodity exporting nations that have reaped the benefits of China's boom, like Australia, could feel the pangs of an economic slowdown.

"Countries that are relatively dependent on commodity exports, I think they are in a particularly vulnerable spot. They have done really well the last couple of years, but now with the weaknesses in the economy setting in and to some extent the slowdown in China, commodity prices are vulnerable to weakening. " Mr Hofman told reporters from Tokyo.

Australia's biggest trading partner China, is in for significant drop in economic growth to 8.2 per cent in 2012, down from 9.2 per cent in 2011, and could possibly make a slight comeback to 8.6 per cent in 2013.

In spite the said regional growth slowdown, the Asia-Pacific and the rest of the East Asian Region is seen to outperform the rest of the world, which is forecast to grow by just 2.6 per cent this year, the World Bank said in its issued commentary.

However, the World Bank cited that China's economy could decline further with the further worsening of Europe's sovereign debt crisis.

Australia's Domestic Growth on Turtle Pace

As perceived earlier by the country's central bank, Australia's economic pace has been slowing down, which was confirmed Wednesday by the latest Westpac-Melbourne Institute Leading Index.

The Reserve Bank of Australia (RBA) has set for domestic activity to advance by an average of 2.9 percent in the current year but the March index, which reflects the local economy's range of movement over next nine months, showed a surge of only 2.2 percent.

The spikes, economists said, fell short of the long-goal set by the country's economic policy managers for Australia, with the RBA already downgrading its prospects for the domestic settings following the 50-basis-point cash rate reduction it imposed a few weeks prior.

However, the same index reported too that ongoing economic movements appear to be at par with the pre-set rate of 3.0 percent, with the annualised coincident level reaching 3.1 percent as of March this year.

The moderate reading came out as the Organisation for Economic Cooperation and Development (OECD) said in Paris this week that Australia seems on its way to overtake the growth movements of many developed nations, the United States and United Kingdom including.

The review handed down by the international body also gave a stamp of approval to the federal government's recently presented budget plan for the financial year 2012-2013, which contains spending cuts of about $40 billion en route to a surplus target of $1.5 billion.

Such goal, according to the OECD, was both timely and ambitious while in many in the business community deemed the government's too much fixation on its surplus goal as distracting.

Economists also fear that too much limitation on fiscal spending by the national government could create undue pressure on the local economy, which is already wary of the possible dire effects in the event the European financial crisis spirals further downward.

Yet according to Westpac chief economist Bill Evans, Australia generally enjoys an environment that firmly rests on optimistic outlook, many thanks to the soars in the home building activities and the surge generated lately by the local bourse.

In fact, "the growth rate has picked up somewhat from the absolute low in November last year, but the level in March does not encourage too much optimism that growth is likely to exceed trend any time soon," Mr Evans was reported by the Australian Associated Press (AAP) as saying in the report.

The present indicators pointed to the general picture that says "Australia had grown below trend for five consecutive years," he added.

In many respects, the local economy appears more sensitive of the situation in Europe, which Mr Evans said hardly emitted any signs of improvements, than the policy easing handed down by the RBA this month.

The central bank had slashed the country's borrowing cost by a big chunk in May but for Mr Evans, Australia's "monetary policy settings are still only in the mildly stimulatory range."

In order for the RBA's intervention to deliver the desired impact, Mr Evans predicted that another 50-basis-point should be forthcoming over the next three months, with the RBA board hoping that a cash rate level of 3.25 percent (from the present 3.75 percent) would be sufficient enough to feel the amount of stimulation it first aimed to witness this month.