IMF awards gold star to Australian economy

Australia’s economy is in a very strong position and set for continued growth in the years ahead, according to a glowing new report issued by the US-based International Monetary Fund.

The report by the IMF executive board of directors says Australia’s very strong fiscal position and sound fiscal, monetary, and structural arrangements will support continuing economic expansion and high employment.

The IMF says Australia’s economic managers can take much of the credit for the strong economic position, saying the Government and institutions such as the Reserve Bank of Australia are “exemplary” and “widely recognised as being at the forefront of international best practice”.

But the IMF did signal one point of concern for the politicians with their hands on Australia’s economic levers, warning that inflationary pressures could mount if booming revenues are allowed to flow through into increased spending.

“Going forward, the surplus [should] be allowed to exceed budget forecasts if growth and revenues are stronger than expected given the strength of economic activity,” the report says.

In market news today, the S&P/ASX 200 has followed a recent pattern of opening strongly before levelling out later in the day – by 12.10pm the market had lost some of its early gains but still remained up 0.6% on yesterday’s close to 6267.3 points.

At the same time the Australian dollar is worth US83.99c, not far from yesterday’s closing price of US83.96c.