IMF cuts Australia’s growth outlook as economic pressures continue

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International Monetary Fund has lowered its forecast for Australia’s economic growth, warning that momentum is slowing.

The IMF expects Australia’s real GDP to grow 1.9% in 2026, slightly below its previous forecast, and 1.7% in 2027. This is well below Australia’s long-term average growth rate of more than 3%.

The global growth outlook was also revised down, with the IMF forecasting the world economy to expand by 3% in 2026, before improving to 3.4% in 2027.

Treasurer Jim Chalmers said Australia remains one of the stronger-performing advanced economies, despite global challenges affecting growth.

The warning comes after the Organisation for Economic Co-operation and Development raised concerns about falling household purchasing power, with wages struggling to keep pace with inflation.

The Reserve Bank of Australia has also warned that future interest rate decisions will depend on inflation expectations and economic conditions.

Adding to concerns, Deloitte forecast further economic weakness, predicting another possible interest rate increase before rates remain higher for longer.

Economists say Australia faces a challenging period as households, businesses and policymakers navigate slower growth, inflation pressures and uncertainty.

Source : News.com

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