IMF backs RBA not cutting interest rates and says phasing out tax breaks for property investors would be ‘equitable’

Extra government spending could inject ‘additional stimulus’ into the Australian economy, hurting the fight against inflation, the IMF says. Photograph: georgeclerk/Getty Images

Extra government spending could inject “additional stimulus” into the Australian economy, posing a risk the Reserve Bank will have to lift interest rates to keep inflation on a downward track, the International Monetary Fund says.

While Australia’s economy remained “resilient” and GDP growth should start to accelerate, it wasn’t yet time to cut official interest rates, the IMF said in its 2024 assessment report released on Thursday.