IMF bucks RBA with strong Aussie economic growth forecast

InvestorDaily

The IMF has forecast stronger economic growth for Australia than the RBA is expecting while recommending tax reforms ahead of the May budget. In its yearly report on Australia’s economy, the International Monetary Fund (IMF) said the country was managing a “soft landing” following the pandemic, with “economic recovery expected to continue in the near-term.” Its outlook was more optimistic than recent forecasts from the Reserve Bank of Australia (RBA), projecting the economy to grow by 2.1 per cent this year to $3 trillion, compared with the RBA’s 1.8 per cent growth forecast.

The IMF predicted that this growth would be driven by the private sector. However, the fund also noted that inflationary pressures have “re-emerged” for the country in recent months, while wage growth is expected to ease further, partly reflecting subdued productivity growth. “Executive directors welcomed Australia’s progress toward a soft landing and internal balance, notwithstanding uncertainties regarding residual excess demand and supply capacity in the context of weak productivity growth,” it stated. 

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