While the global economy is set to avoid a recession, the fallout from China’s toxic property sector and persistently high interest rates point to an increasingly grim outlook for the Australian economy, the International Monetary Fund (IMF) has warned.
In its latest World Economic Outlook released on Tuesday, the IMF said although the global economy had displayed remarkable resilience and the chances of a “soft landing” were increasing, growth remained “slow and uneven”
Economic contagion from China’s debt-ridden property sector is a key risk to global growth, the IMF has cautioned. Photo by Noel Celis / AFP Inflation won’t return to the Reserve Bank of Australia’s 2 to 3 per cent inflation target until at least 2025, according to the forecasts. Treasurer Jim Chalmers said sticky price pressures across the global economy would weigh heavily on the local outlook. Picture: NCA NewsWire/ Linda Higginson
“The IMF’s policy prescriptions align squarely with the Albanese Government’s economic plan and the Employment White Paper” he said.Weighing on the outlook at home was a further decline in global economic growth, which is expected to slow from 3 per cent this year to 2.9 per cent in 2024, a 0.1 percentage point downgrade from April estimates, and well below the historical average.
“The global economy is limping along, not sprinting,” the fund’s top economist Pierre-Olivier Gourinchas in a statement accompanying the report.
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