The International Monetary Fund (IMF) has today delivered a positive economic report card in its annual review of the Australian economy, welcoming our budget management, strong economic growth, improved labour market conditions and housing affordability reforms.
Following a two-week mission to Australia including consultations with businesses, academics, officials and economic regulators, the IMF’s preliminary ‘on the ground’ assessment of the Australian economy is good news.
Its headline finding is that “Australia’s recent strong growth is expected to continue” with growth picking up strongly to well above three per cent in 2018, driven by business investment and private consumption.
Importantly, the IMF notes that this “strong economic momentum has resulted in further improvements in labour market conditions” and they see gradual upward pressure on wages.
It also says “the cooling of the housing market is welcome and contributes to improving housing affordability”, noting that measures introduced by APRA have reduced the share of investor and interest-only borrowing and lowered the risks to financial stability.
Their overall assessment when it comes to the housing market is that “the correction remains orderly”, but that “other negative risk developments” they say “could amplify the correction and lower domestic demand.”
The IMF’s assessment builds on recent findings from global credit rating agencies, Standard & Poor’s and Fitch, which reaffirmed Australia’s AAA credit rating and welcomed our budget management.
The Coalition Government’s economic plan is delivering strong economic and jobs growth. Over the last financial year, almost 350,000 jobs were created, the largest number in any financial year since 2004. Unemployment is down to 5.0 per cent, and there are now more than one million additional people in work than when we came into office five years ago.
The Coalition Government’s economic plan is working and the IMF’s positive report card is testament to that. Australia cannot risk a return to Labor’s high tax and spend approach.