Australia's jobless rate could be heading down to five per cent over the next couple of years as economic growth speeds up with the global economy taking on a more positive tone.
The International Monetary Fund is forecasting Australian growth rising to 3.1 per cent for 2017, up from 2.5 per cent in 2016.
In its latest World Economic Outlook, the IMF says commodity-exporting economies like Australia are set to recover, especially given the average 20 per cent increase in coal prices.
"The acceleration in activity will be supported by accommodative monetary policies, supportive fiscal policies or infrastructure investment, improving sentiment following the upturn in commodity prices, and less drag from declining investment in the commodity sector," it says in the report released on Tuesday.
The Washington-based institution is forecasting an Australian unemployment rate of 5.2 per cent by the end of the year compared with 5.9 per cent as of March.
IMF'S KEY AUSTRALIAN ECONOMIC FORECASTS (PER CENT)
GDP
2016 - 2.5 (actual)
2017 - 3.1
2018 - 3.0
CPI
2016 - 1.3 (actual)
2017 - 2.0
2018 - 2.4
UNEMPLOYMENT
2016 - 5.7 (actual)
2017 - 5.2
2018 - 5.1
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