The IMF’s World Economic Outlook has slashed Australia’s economic growth forecasts to be only 1.7 per cent in 2019, and 2.3 per cent in 2020.
This represents a substantial downgrade of 0.4 percentage points in 2019, which is larger than the downgrade to global growth and four times as large as those for the euro area and advanced economies as a whole.
These growth downgrades come after the IMF downgraded Australia’s economic growth in its April Outlook earlier this year.
Australia’s growth this year is now expected to be slower than the US, Spain and Greece.
The IMF has called on countries, including Australia, to provide fiscal stimulus and invest in infrastructure to support their economy and improve productivity.
According to the IMF, “Monetary policy cannot be the only game in town and should be coupled with fiscal support where fiscal space is available.”
The IMF’s updated forecasts make a mockery of Josh Frydenberg’s claims that the Morrison Government has the right policy settings.
Collapsing confidence and weak growth are the inevitable consequence of a Liberal-National Government which has a political strategy but not an economic policy.
Right when Australians need and expect a plan from the Morrison Government to get the economy going again all they get instead is finger-pointing, blame-shifting and wedge politics.
It is time Josh Frydenberg and Scott Morrison brought forward a budget update to fix their forecasts and properly outline an economic plan that supports the floundering economy and better safeguards Australians from global turbulence.
WEDNESDAY, 16 OCTOBER 2019