Australia's economy will likely benefit from the passage by the US House of Representatives of a $1.24 trillion stimulus package aimed at jolting America out of a deep recession.
The plan, en route to the Senate, will involve tax cuts, spending projects and greater social benefits aimed at creating up to 3.6 million jobs.
"Obviously we would benefit from a package, because higher demand and higher spending from the American consumer flows on to two of Australia's big trading partners, China and Japan," Lincoln Indicators chief executive Elio D'Amato said.
But the package will not answer the big question of the ailing US finance sector, he said.
"Obviously there are still issues around Citi and a number of the larger banking houses," D'Amato said.
"Until we regain confidence that the worst of the US financial storm is over we're just going to have this level of uncertainty overhang the market."
Talk of the proposed creation of a "bad bank" by the US Federal Deposit Insurance Corporation that would allow financial institutions to move toxic assets off their books is a possible solution, he said.
Approval of the stimulus came as the International Monetary Fund (IMF) yesterday downgraded global growth by 175 basis points to 0.5 per cent in 2009, the slowest pace since World War II.
D'Amato agreed with the IMF report, which said that toxic assets must be cleaned out from banks in addition to a big stimulus in order for an economic recovery to occur.
