Australia: 2024 Article IV Consultation-Press Release; and Staff Report

International Monetary Fund

No 2024/360, IMF Staff Country Reports from International Monetary Fund

Abstract: The 2024 Article IV Consultation highlights that Australia’s economic growth slowed to 1.0 percent (y/y) in Q2 2024 from 1.9 percent a year prior, with private consumption growth dropping to 0.5 percent (y/y). Growth in private business investment also eased to 1.6 percent (y/y). Economic activity was bolstered by public demand and infrastructure projects. Growth is projected to pick up gradually, from 1.2 percent in 2024 to 2.1 percent in 2025. Real income growth from rising wages and tax cuts may boost private consumption, while public demand will remain strong. Australia's continued commitment to multilateral solutions, including the rules-based international trading system, is commendable. In order to avoid undue distortions, both domestically and internationally, green industrial policy initiatives should be confined to narrow objectives—where externalities or market failures prevent effective market solutions—and be consistent with the country’s international obligations. Additionally, Australia's voluntary participation in reviewing transnational corruption sends a positive signal that could inspire improvements in global governance.

Keywords: FSAP update; article IV consultation discussion; FSAP mission; consultation cycle; upside inflation risk; Labor markets; Inflation; Housing prices; Housing; Global (search for similar items in EconPapers)
Pages: 110
Date: 2024-12-23
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