IMF upgrades Australia's growth forecasts, expects 2017 GDP at 3.1 pct

In its latest World Economic Outlook report published overnight, the International Monetary Fund (IMF) raised its growth forecasts for the Australian economy. The IMF upgrades Australian GDP to 3.1 percent for 2017, from 2.5 percent in 2016, and at 3 percent for 2018.

The IMF sounded much more optimistic than its review released in February, which characterised Australia’s outlook as “mediocre” and was also well ahead of Treasury’s mid-year budget review released before Christmas.

The IMF expects inflation to hit 2 percent this year, from 1.3 percent last year. The IMF predicts that Australia’s unemployment will drop from its current rate of 5.9 percent to 5.2 percent this year as economic growth rockets from 2.5 percent to 3.1 percent.

The fund has lifted its growth forecasts for the US, China, ­Europe, Britain and Japan, although it expects Australia to retain its position as the fastest growing economy among the 20 largest advanced countries.

“The global economy seems to be gaining momentum — we could be at a turning point,” said IMF's chief economist, Maurice Obstfeld.