IMF downgrades Australian economic forecast amid fears of interest rate hike
Global financial institution predicts Australia’s GDP will grow to just 1.6% in 2027 as Treasury faces rising energy costs and inflation Get our breaking news email , free app or daily news podcast The International Monetary Fund has downgraded its forecast for Australia’s economic growth in 2027, warning the Reserve Bank may have to hike interest rates further to get price pressures back under…
The International Monetary Fund has downgraded its forecast for Australia's economic growth in 2027 to 1.6%. According to The Guardian Australia, this downgrade is due to rising energy costs and inflation, which may prompt the Reserve Bank to hike interest rates further.
The Reserve Bank of Australia's cash rate is currently 4.35%, higher than the US Federal Reserve's range of 3.75-4.00%. As reported by FXStreet, most big Australian banks expect the Reserve Bank to raise interest rates again before the end of the year. Inflation in Australia was 3.5% in July, with the underlying measure at 3.6%.
The IMF has also called on federal and state governments to tighten their belts, with more disciplined budgets needed to rein in rising debt burdens and help solve Australia's long-running inflation problem, as per The Guardian Australia.
Brief written by urgent.news from The Guardian Australia, FXStreet — 2 reports on this story. Machine-written — may contain errors; check the original before relying on it.
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