SYDNEY - PRIME Minister Kevin Rudd Friday welcomed comments from Australia's central bank that the country can avoid a recession, but said economic growth would be hard to achieve given the financial crisis.

Deputy governor of the Reserve Bank of Australia (RBA), Ric Battellino, told a conference on bankruptcy on Thursday that the country's economic performance would likely be below average for the next few years.

But he said Australia was well placed to handle the current financial turmoil and was on track to avoid following other economies into a recession.

Mr Rudd, who has argued that Australia will face a slowdown in growth and rising unemployment as a result of the global turmoil triggered by the subprime mortgage crisis in the United States, seized on Mr Battellino's comments.

'I certainly agree with what the deputy governor said, because this is the core challenge of the government, to do whatever is necessary to support positive economic growth', Mr Rudd told the Fairfax Radio Network.

'This will be tough, very tough because most other developing economies around the world are either in recession or heading there right now, and we are part of a global economy'.

Mr Rudd, whose centre-left Labor Party has been in power less than a year, said part of his government's response was its A$10.4 billion (S$10.2 billion) stimulus package which will deliver one-off payments to pensioners and families and its incentives designed to boost the housing market.

The RBA has meanwhile lowered interest rates since the onset of the financial crisis, slashing 100 basis points from its official cash rate in October to bring it down to 6.0 per cent.

In his speech on Thursday, Mr Battellino noted that Australia managed to sidestep the 2001 global recession.

'Can it do it again? That is certainly what we are aiming for, and there is nothing in the data to date to suggest that we are off track', he said.

Mr Battellino said that while many people would be disappointed with below average growth, the economy could not always grow at an above average rate and 'it certainly cannot maintain the pace of the past five years'.

He said Australia's links to China, and Asia's massive demand for commodities from Down Under, would work in Australia's favour in avoiding a recession as it did in 2001.

'China's strong long-term growth potential must be a source of optimism about our own long-term prosperity, given our role as one of its most important suppliers of raw materials', he said. -- AFP