Rudd Inherits Red-Hot Economy

New Aussie PM faces inflationary risks in boom times
By Kevin Spak,  Newser Staff
Posted Nov 26, 2007 2:57 PM CST
Supporters play with a balloon before Australia's new Prime Minister Kevin Rudd delivers his acceptance speech following his victory in the 2007 federal election, in Brisbane, Australia, Saturday, Nov....   (Associated Press)
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(Newser) – New Aussie PM Kevin Rudd inherits a booming economy, but that doesn't mean it's going to be an easy ride for his center-left government, the Wall Street Journal warns. Demand for Australia's natural resources is feverish and inflation is already uncomfortably high. Rudd has vowed to pump about $48 billion into benefits and tax cuts for Australians, which could seriously overheat the already torrid economy.

He will also face challenges in maintaining the nation's traditionally close ties with the US while distancing himself from some of President Bush's positions; he has said he will withdraw Australia's 550 troops from Iraq and ratify the Kyoto Protocol. A fluent speaker of Mandarin Chinese, Rudd is expected to seek closer ties with China.