IMF downgrades Australian economic forecast amid fears of interest rate hike

The International Monetary Fund has downgraded its forecast for Australia's economic growth in 2027 to 1.6%. According to The Guardian, the IMF warned that the Reserve Bank may need to raise interest rates further to control price pressures.

The IMF 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 reported by The Guardian and The Guardian Australia.

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%. FXStreet reported that most big Australian banks expect the RBA to raise interest rates again before the end of the year, due to high inflation, which was 3.5% in July.

Brief written by urgent.news from The Guardian, The Guardian Australia, FXStreet — 3 reports on this story. Machine-written — may contain errors; check the original before relying on it.