Peter Dutton shudders at Australia’s ‘horrifying’ IMF inflation forecast

Peter Dutton says Australians should be “horrified” by an international report showing inflation would remain higher in Australia than many developed economies into the next year.

The Opposition Leader seized on a report from the International Monetary Fund overnight that declared “the global battle against inflation is almost won” but forecast in Australia, prices would rise by 3.3 per cent in 2024 – just above the Reserve Bank’s target range.

“I think every Australian will be horrified by the news from the IMF overnight that shows Australia lagging at the back of the pack when it comes to inflation,” he said.

The IMF forecast inflation in Australia would be 3.2 per cent across 2.25 and down to 2.9 per cent in 2026. This contrasts with Treasury’s forecasts in May that it would fall to 2.75 per cent by mid-2025.

The report, along with Deloitte’s latest business outlook, predicted sluggish growth for the Australian economy as the global position slows considerably.

Treasurer Jim Chalmers, who is en route to the US for meetings with the IMF, G20, World Bank and other international economic figures, said the IMF report highlighted the big risks weighing on “a weak and fragmented global economy”.

“Australia is not immune from the volatility and vulnerability which characterises the global economy. The risk of further escalation in the Middle East threatens a resurgence in oil prices and casts a dark shadow over the global outlook,” he said.

“There is always a premium on responsible economic management and engagement but especially now, with all this uncertainty around the world.”

Inflation has halved over the past two years and the Government has repeatedly pointed to the fact it peaked lower than in comparable countries, as did interest rates – while acknowledging the past couple of years have still been very tough for many Australians.

However, the Reserve Bank has so far held the official cash rate at 4.35 per cent while central banks in other countries including the US Federal Reserve have begun lowering theirs.