Australia’s economy seen growing at ‘modest’ pace

SYDNEY: Australia’s economy is expected to accelerate at a “modest” pace as weak wage growth is seen weighing on consumption, keeping the need for stimulative monetary and fiscal policies, the International Monetary Fund said on Monday. 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 per cent for more than a year now with core inflation below its 2-3 per cent 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.”— Reuters