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IMF predicts stronger growth for the Australian economy.

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The IMF in the September 2003 World Economic Outlook expects that Australia will continue to be one of the fastest growing advanced economies in the world next year.

Despite the weak global economy and the lingering impact of the drought, the IMF forecasts that the Australian economy will grow by 3 per cent in 2003, before rebounding to 3.5 per cent in 2004. The IMF also expects the unemployment rate to remain low and inflation moderate. The IMF has again commented favourably on Australia’s sound fiscal position, noting that public debt continues to be paid down.

The IMF expects the global recovery to accelerate in the second half of 2003 and into 2004. A slightly weaker outlook for the economies of Europe and Non-Japan East Asia has been broadly offset by a more positive outlook for the United States and Japan. However, the risks remain somewhat slanted to the downside despite the easing of geopolitical uncertainties and the continued flow through of policy stimulus already in the pipeline. The IMF remains supportive of accommodative monetary policy among advanced economies but urges a credible strategy to achieve fiscal consolidation over the medium-term.

The good performance of the Australian economy has occurred against a backdrop of weak global demand, an extensive drought and a number of temporary international shocks. The Government’s commitment to sound economic management has ensured that Australia remains well placed to meet these challenges.

CANBERRA 18 September 2003

Contact: David Alexander (02) 6277 7340

© Commonwealth of Australia 2000