The IMF recommends the Reserve Bank of Australia raise interest rates even higher

The International Monetary Fund’s latest report on Australia is forecasting inflation to return to the target range of 2-3% only in 2026. This is later than the Reserve Bank of Australia’s projection of December 2025.

  • IMF said interest rates were tightening financial conditions in Australia, but rate rises in Oz had been behind other developed market economies
  • Australia’s inflation was falling slowly
  • services inflation
    remained high
  • jobs market is still tight, this could further slow the drop in inflation

“Monetary policy
should be tightened further to ensure inflation comes back to target
earlier than 2026 projected in the baseline”

it argued.


The Reserve Bank of Australia next meet on February 5 and 6. Ahead of that meeting is the latest official quarterly CPI data. This will set the tome for the meeting. Recent data from Australia shows that:

Inflation picked up in December according to a private survey:

The jobs market is showing some signs of slowing:

This article was written by Eamonn Sheridan at Source