* GDP growth seen at +0.8 pct in 08/09, +0.5 pct 09/10
* Inflation seen slowing to 1.9 pct in 2009/10
* Argues for rates to stay low for some time to come
By Wayne Cole
SYDNEY, July 15 (Reuters) - Australia should escape the recession engulfing much of the developed world thanks to aggressive stimulus and abundant resources, though growth is likely to be anaemic at best for the coming year or so.
Still, subpar growth means inflation should slow and offer plenty of room for more rate cuts if needed, a luxury in a world where many central banks are already near the zero bound.
Analysts polled by Reuters thought gross domestic product (GDP) grew by 0.8 percent on average over the 12 months to June, a stalwart performance given the worst global recession since the 1930s.
"The big picture remains that aggressive easings of monetary and fiscal policy have stabilised the economy - at least for now - faster than almost anyone dared hope," said Rory Robertson, interest rate strategist at Macquarie in Sydney.
The Labor government has spent or pledged over A$52 billion ($41 billion) in tax breaks and infrastructure projects, while the Reserve Bank of Australia (RBA) cut its key cash rate by 425 basis points to a record low of 3 percent.
Such largesse has provided crucial support to household consumption and helped offset a slump in business investment.
Yet new headwinds lie ahead, particularly the drag on trade from huge falls in prices for iron ore and coal, Australia's two largest exports.
That was why analysts expected the country's current account deficit to widen to around A$52 billion in 2009/10, from an estimated A$31 billion in 2008/09.
For details of the poll click on.
It was also a major reason they forecast GDP growth of just 0.5 percent over 2009/10, well below the long-term trend of around 3.5 percent.
Much would depend on how the labour market fared and, so far, it has held up far better than almost anyone expected.
So far this year, total employment here has fallen by a modest 39,000, while U.S. payrolls were down by 3.4 million. The unemployment rate had risen to a six-year high of 5.8 percent, but that compared to 9.5 percent in the United Sates.
Warren Hogan, head of Australian economics at ANZ, said firms were clearly hoarding labour for longer in this downturn in anticipation of a recovery in the broader economy.
"But with hours worked and indicators of new labour demand already at recessionary levels, we doubt that labour hoarding can continue without a sustained improvement in underlying demand," warned Hogan.
"With direct fiscal stimulus likely to fade over the months ahead, the risk of a broader downturn in the labour market remains."
At least the slowdown in the economy has tamed Australia's inflation troubles, with consumer price growth seen ebbing to 1.9 percent in 2009/10, from 3.1 percent in 2008/09. That would be below the floor of the RBA's 2 to 3 percent target band, allowing it to keep monetary policy exceptionally loose.
"Global excess capacity is staggering, while locally, Australian inflation is set to print close to 1 percent on the year, the lowest rate in a decade," said Annette Beacher, senior strategist at TD Securities."
"Inflation will undershoot the bottom of the RBA target until mid-2010, so we remain comfortable with the view that the RBA is in no hurry to remove the stimulus in the economy." (Editing by Kazunori Takada)