The International Monetary Fund (IMF) expects the Australian economy to grow by 3.25 per cent in 2012, despite a sharp fall in commodity prices.
In preliminary findings released on Thursday, the IMF said it expects Australia's growth rate to be relatively in line with previous forecasts for the calendar year.
However it believes there will be some weakness in the final two quarters.
Australian Bureau of Statistics data released earlier this month showed the national economy grew by 0.6 per cent in the June quarter and 1.4 per cent in the March quarter.
"We are forecasting some slowdown in the second half of the year but, looking at the entire year it (growth) will land around 3.3 or 3.2 per cent," the head of the IMF's Australian mission Masahiko Takeda told reporters in Sydney.
The IMF also expects the national unemployment rate to remain slightly above five per cent for the next year.
However, Dr Takeda said falling iron ore and coal prices could impact on the growth forecasts.
"If iron ore prices become even weaker we will need to adjust pure forecasts."
The Reserve Bank of Australia on Tuesday said iron ore prices had fallen 35 per cent since mid-July.
Dr Takeda also said the Australian dollar appeared to be "somewhat overvalued", though not substantially so, which was having a negative effect on some parts of the economy.
He said the IMF would downgrade its growth forecasts for China, Australia's biggest trading partner, slightly next month but was confident the country would achieve a "a soft landing" and continue to record strong growth.
But he said with moderate public debt, a floating inflation rate and comparatively high interest rates, Australia had the ability to respond to a deeper decline in Asian growth as well as worsening European sovereign debt crisis.
"Australia has policy space to mobilise," he said.
The IMF also said Australia's banking system was well placed to withstand a US-style housing crisis.
The organisation's monetary and capital markets division chief Dr Cheng Hoon Lim said the IMF had carried out 'stress tests' to see how Australia's banks would cope with a collapse in the housing market.
"Even in the most extreme scenario the banking system fared pretty well," she told a forum in Sydney.
Dr Cheng said the stress tests showed Australia's banking system would hold up even in the event of a five per cent drop in GDP and 35 per cent fall in house prices.
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