Australia: 2018 Article IV Consultation-Press Release; Staff Report; and Statement by the Executive Director for Australia

IMF Staff Country Reports, February 21, 2019

Source details

Canonical URL

Australia: 2018 Article IV Consultation-Press Release; Staff Report; and Statement by the Executive Director for Australia

Other formats

• Markdown version
• Structured JSON version
• Bundle manifest

Bibliographic details

• Published: February 21, 2019
• Series: IMF Staff Country Reports
• DOI: https://doi.org/10.5089/9781484399019.002

Executive summary and economic outlook

• Australia experienced only a minor downturn after the end of the mining investment and commodity price boom, but the adjustment and rebalancing has been slow.
• The economy faces below-target inflation and low wage growth amid economic slack.
• Baseline forecasts entail a soft landing in the housing market, but a stronger market correction remains a risk.
• Near-term risks to growth are to the downside, mirroring the global risk picture; the impact of shocks could be amplified by high household debt.
• IMF staff welcomes the authorities’ continued commitment to working actively with international partners to promote the global multilateral trading system.
• Macroeconomic policy support should remain in place until full employment and inflation in the target range are firmly within reach.

Macro-financial vulnerabilities

• High household debt and low housing affordability have become major concerns after a recent housing boom.
• The baseline assumes a soft landing in housing, but a stronger market correction is identified as a significant risk that could interact with household leverage.

Policy priorities and structural agenda

• The structural policy agenda appropriately targets:
  • innovation,
  • infrastructure gaps,
  • tax reform,
  • energy policy.
• Progress has been limited in some areas.
• Policy recommendation: maintain macroeconomic policy support until labor market and inflation outcomes meet targets.

Key subject areas and keywords (as listed)

• Subject: Banking, Housing, Housing prices, Inflation, Infrastructure, Labor, Labor markets, National accounts, Prices
• Keywords: ABS implementation, Asia and Pacific, child care policy initiative, CR, Global, government, Housing, housing market, housing market correction, Housing prices, Inflation, Infrastructure, ISCR, Labor markets, liability positions vis-à-vis nonresident, monetary policy, state, trend estimate

Content in this bundle

• Australia’s Housing Price Correction in Perspective
  • Australia’s Housing Price Correction in Perspective (Markdown version)
  • Australia’s Housing Price Correction in Perspective (PDF)