IMF predicts severe inflation challenges ahead for Australia
The IMF has delivered a grim forecast for Australia, placing the nation second among countries expected to grapple with persistent inflation well into 2025.
www.accountingtimes.com.auHere’s the latest I can share based on recent IMF commentary and forecasts:
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IMF forecasts for Australia inflation have shown expectations of higher inflation than many advanced economies in 2025, with Australia projected to experience a roughly mid-3% level (around 3.6% in some IMF projections for 2025) before easing in 2026 in several assessments. This has been a focus of IMF World Economic Outlook coverage and commentary from financial outlets in late 2024 and early 2025. [sources discussed: IMF World Economic Outlook coverage and related reporting][1][2][3]
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The contrast often highlighted is between IMF projections and domestic forecasts (such as those from the Reserve Bank of Australia and Treasury), where the IMF’s higher inflation path has prompted scrutiny of policy settings and inflation persistence remaining above target longer than some forecasters expect.[3][5]
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In the period around 2024–2025, several outlets reported that Australia’s inflation was expected to outpace many advanced economies, with some IMF projections suggesting inflation staying above the 2–3% target band into 2025, before any potential moderation.[4][3]
If you’d like, I can pull up the most current IMF release (World Economic Outlook or Article IV statements) and summarize the exact 2025–2026 inflation projections for Australia, including the assumed path for policy rates and any caveats they note about global energy prices or supply-side pressures. I can also provide a brief side-by-side with the RBA/Treasury projections to show the divergence. Would you like me to do that and cite the specific IMF document?