IMF Warns RBA: Stand Ready for More Rate Hikes

The Reserve Bank of Australia (RBA) is likely to raise interest rates again soon, according to the International Monetary Fund (IMF). The IMF's latest report on the Australian economy says that the RBA should 'stand ready' to hike rates if inflation persists.

The current 'soft landing' strategy has been derailed by weak productivity growth and rising oil prices. The IMF warns that further rate hikes may be necessary to control inflation, but cautions that a sharp slowdown in economic growth could require rate cuts instead.

Australia's productivity growth has been stagnant for four years, limiting the country's ability to grow without pushing up inflation. The IMF welcomes the government's efforts to improve productivity, but calls for a more ambitious reform strategy to boost competition and reduce over-regulation.