Australia: 2022 Article IV Consultation-Press Release; and Staff Report
IMF Staff Country Reports, February 1, 2023
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Bibliographic details
- Published: February 1, 2023
- Series: IMF Staff Country Reports
- DOI: https://doi.org/10.5089/9798400230127.002
Macroeconomic overview and cyclical position
- Rapid post-pandemic economic recovery and favorable terms of trade have placed Australia in a stronger cyclical position than many other advanced economies, with limited scarring.
- Inflation has risen to significantly above target, prompting decisive monetary policy tightening.
- Financial conditions have tightened, and housing prices started declining from their peak.
- Australia is on a narrow path to a soft landing.
Growth and inflation projections
- Growth is expected to slow to 1.6 percent in 2023 from 3.6 percent in 2022 as higher interest rates and weaker global growth cut into domestic demand and net exports.
- Inflation is projected to decelerate slowly toward the 2-3 percent inflation target by the end of 2024.
Risks and uncertainties
- Downside risks to the economic outlook dominate.
- Significant uncertainty surrounds:
- global growth,
- commodity prices,
- domestic developments including wages, housing prices, and the effect of tighter monetary conditions.
Structural and policy recommendations
- Structural policies can help foster sustainable, equitable and inclusive growth.
- The new climate change mitigation targets should be supported with strong policies.
- Continued structural reform efforts are recommended to address the labor productivity slowdown and achieve greater inclusion.
International Monetary Fund. Australia: 2022 Article IV Consultation-Press Release; and Staff Report, IMF Staff Country Report No. 2023/050.
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