The International Monetary Fund has today again commended Australia's response to the global recession, noting that "[t]he authorities' timely and significant macro policy response cushioned the domestic impact of the global financial crisis."
In the face of the worst global recession in 75 years, the IMF Article IV report shows that Australia has the best performing economy of any developed country.
The IMF considered the near-term outlook for the Australian economy to be highly uncertain, but makes clear that the Government and RBA's actions are "expected to limit the decline in real activity to ½ per cent in 2009, despite lower commodity income and rising unemployment." The IMF projects growth, led by government infrastructure spending, will return to 1½ per cent in 2010.
The IMF noted that "quick implementation of targeted and temporary fiscal stimulus is providing a sizable boost to domestic demand in 2009 and 2010". These policy measures are supporting jobs now, while investing in the nation building infrastructure we need to take full advantage of the global economic recovery when it occurs.
The IMF commended the Australian Government on its response to the global recession, in particular the "quick implementation of fiscal stimulus and noted that the shift into deficit was justified in current circumstances."
The IMF noted that Commonwealth government debt is projected to remain low compared with other advanced economies, "leaving Australia in an enviable fiscal position by international standards".
This accords with recent reports from the OECD and the IMF confirming that Australia has lower debt and lower deficit than any major advanced economy.
The IMF recognised the Government's "swift introduction of deposit and wholesale funding guarantees helped to maintain confidence in banks" has helped to ensure credit continues to flow to the economy throughout the global crisis.
On an annual basis the IMF consults with the Australian authorities, private sector economists and academic experts to provide an independent and comprehensive assessment of Australia's economic performance. This forms part of its program of economic consultations with all IMF member countries.
8 August 2009