SYDNEY, Sept 20 Australia's outlook remains
favourable and the economy should grow around 3.25 percent this
year, in line with potential, thanks to still strong resource
investments, the International Monetary Fund (IMF) said in a
report on Thursday.
The IMF also said monetary policy should remain
accommodative given the benign outlook for inflation, a strong
Australian dollar and the government's fiscal tightening
"Overall, the economy is in good shape and policies are
broadly speaking appropriately set," said Masahiko Takeda,
Deputy Director, Asia and Pacific Department at the IMF.
But Takeda warned a hard landing in China, Australia's
single largest export market, was a risk, albeit a relatively
low probability one.
Still, in event of any adverse shocks, the Reserve Bank of
Australia and the government have the policy scope to respond,
The RBA left interest rates unchanged at 3.5 percent this
month, having cut twice earlier in the year. Markets are giving
a better-than-evens chance of a cut next month.
(Reporting by Ian Chua)