Australia's Prime Minister Kevin Rudd Thursday warned the country faced a long road to economic recovery with unemployment set to rise "for some time to come."

Rudd, addressing the governing Labor Party congress, said government action had softened the downturn's blow but tempered hopes of a fast recovery despite rising optimism that the worst is over.

"Notwithstanding what we have done, the road to recovery will be long, hard and uneven, with many twists and turns," he told party delegates.

"Unemployment will continue to rise for some time to come."

Labor has credited stimulus worth more than 50 billion dollars (40.8 billion US) for surprise growth in the June quarter that staved off a technical recession and made Australia the world's best-performing advanced economy.

Central bank governor Glenn Stevens this week said Australia would not be as badly hit as in previous slumps, saying people in the country increasingly "see the glass as half-full."

But the government forecasts unemployment increasing from 5.8 to 8.5 percent by mid-2011, raising the prospect of rising joblessness at a time when interest rates are also expected to be lifted off the 49-year low of 3.0 percent.

"Our nation-building for recovery plan this year will support more than 200,000 people in work who would otherwise lose their jobs," Rudd said.

"And the same for the year after. But the tragic reality is that many Australians could still lose their jobs."

The centre-left leader was addressing the first Labor conference since ousting John Howard's 11-year Liberal government at the end of 2007.