IMF Warns of More Rate Hikes for Inflation-Fighting Measures

The International Monetary Fund (IMF) has urged the Reserve Bank of Australia to be prepared for more interest rate hikes to combat rising inflation. According to the IMF's latest report, returning inflation to target in the near term should be a top priority.

The IMF attributed the recent break-out in price growth to weak productivity growth and the Middle East conflict. The organization projected that Australia's economy will slow to 1.9% in 2026 and 1.6% in 2027, following three RBA rate hikes so far.

Rising oil prices and hotter-than-anticipated July inflation figures have raised expectations of another rate hike at the September meeting. The IMF emphasized that the Reserve Bank should 'stand ready' to increase interest rates as needed to combat inflation pressures.