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The IMF said that interest rates in Australia were
"appropriately accommodative."
The Reserve Bank of Australia (RBA) has left rates at a record
low 1.50 percent for more than a year now with core inflation
below its 2-3 percent target band for two full years.
"With stronger momentum in domestic demand and inflation close
to the mid-point of the target range not yet secured, continued
macroeconomic policy support will remain essential," the IMF
said in a report after visiting the country.
"With Australia's recovery lagging that of other major advanced
economies, monetary policy should remain firmly focused on
ensuring stronger sustained momentum in domestic demand and
inflation."
The IMF believes that Australia's A$1.7 trillion ($1.3 trillion)
economy could still grow at "above-trend rates" thanks to
infrastructure spending by the government.
The boost from infrastructure will have positive spillovers to
private investment and more than offset the declining
contribution from residential investment.
The report said there was scope to expand on infrastructure
spending, beyond the government's current projects.
"Further increases in investment have the potential to improve
physical and digital interconnectivity, both internally and with
Australia's trading partners, thereby contributing to higher
growth."
(Reporting by Swati Pandey; Editing by Jacqueline Wong)
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