By The Editor
The International Monetary Fund (IMF) has revised downwards its growth forecast for Australia for the financial year amid a warning of a global recession.
The IMF forecast real GDP growth of 1.8 per cent in Australia in 2012, well below the Federal Government’s forecast of three per cent, which casts doubt on the possibility of a budget surplus.
However the IMF is generally positive about the Australian economy and the Asian region generally in its World Economic Outlook, which flags the strong possibility of another global recession if its best-case scenario does not eventuate.
“Markets have clearly become more sceptical about the ability of many countries to stabilise their public debt,” IMF chief economist Olivier Blanchard said. “These worries have led to a partial freeze of financial flows.”
The outlook welcomed the budgeted federal surplus in 2012-13, saying it would take pressure off monetary policy and the exchange rate, but the reduced growth it predicts could make that surplus harder to achieve.
Treasurer Wayne Swan said the report was a reminder of the consequences of a stuttering global economy could have on Australia, and reinforced his surplus pledge for next financial year.
The IMF’s outlook is further evidence of global economic woes being felt, especially in Europe and the United States, that could have a residual effect on the Australian and, in turn, Victorian economy.