IMF slightly more optimistic on Australia

The International Monetary Fund is slightly more optimistic about Australia's economic growth outlook than predictions made in Tuesday's federal budget.

The International Monetary Fund is slightly more optimistic in forecasting Australian economic growth than Treasury's latest predictions handed down in Tuesday's budget.

In its latest regional outlook for the Asia Pacific released on Wednesday, the IMF is forecasting economic growth of three per cent for this calendar year and 3.1 per cent in 2019.

In Treasurer Scott Morrison's budget, growth is forecast at 2.75 per cent for this financial year, followed by three per cent every year until 2021/22.

"Australia's recovery is expected to accelerate, driven by infrastructure investment and private consumption," the IMF said in the report released in Hong Kong.

This outlook assumes a "soft landing" in the housing market, with price growth slowing gradually.

This reflects increased housing supply, changes in demand toward renting and eventually higher interest rates, it said.

More broadly, the Washington-based institution says the outlook for Asia and the Pacific remains strong and the "most dynamic of the global economy".

"Given the many uncertainties, macroeconomic policies should be conservative and aimed at building buffers and increasing resilience," it said.

It said policymakers should also push ahead with structural reforms to address medium- and long-term challenges, such as population ageing and declining productivity growth.

2 min read
Published 9 May 2018 at 12:32pm
Source: AAP