(By Bob Blandeburgo) The Reserve Bank of Australia (RBA) last month became the first Western economy to raise its key interest rate since the financial crisis began almost two years ago. It proceeded to raise the rate for a second time in a month last week, just before it published its quarterly report on Friday, which says bottlenecks obstructing exports of its vast resources such as iron ore and coal are about to be relieved. 

"Over the next two years, if capacity comes on line as planned, production of these bulk commodities could increase by around one third, with further significant increases possible over the remainder of the decade," the RBA said

As a result of this expected boom in the commodities sector, the RBA raised its forecast for growth of Australia's economy from 0.5% to 1.75%, and boosted its 2010 estimate a full percentage point to 3.25%.

"The RBA here is foreshadowing years of expansion based on resources, population and Asian demand," Su-Lin Ong, a senior economist with RBC Capital Markets Corp. told Reuters. "It's big picture positive for Australia and the Australian dollar, and means rates are going nowhere but up."

At the forefront of the Australian economic boom will be the nation's huge natural gas reserves, particularly the Gorgon gas field, first discovered in 1981. Developers Chevron Australia, Shell Development Australia and Mobil Australia Resources in September got their first approval to begin work on the field, which has more than 40 trillion cubic feet of gas.

The Gorgon field, Australia's largest natural resource, is responsible for the nation's largest trade deal ever with the world's fastest-growing economy: China. Inked last summer, the deal calls for PetroChina Co. Ltd.