Australia’s economy recovering faster than expected after COVID: IMF

Australia’s economy is expected to recover faster than first anticipated after the COVID-19 pandemic, the IMF says.

Australia’s growth pros­pects have received a significant boost from the Inter­national Monetary Fund, which has confirmed that the nation’s economy is recovering from the COVID-19 pandemic more quickly and with greater vigour than anticipated.

According to the IMF’s latest World Economic Outlook report Australia’s economy is expected to grow faster than was anticipated even last January.

Australia’s economy is now expected to grow by 4.5 per cent in 2021, which is a full per cent higher than the IMF’s interim outlook released in January.

Treasurer Josh Frydenberg. Picture: Sam Mooy/Getty

“(The) Australian economy continues to show a strong ­recovery momentum,” according to the report, which also notes that the nation’s “favourable labour market recovery continues to support a strong rebound in private consumption, added by wealth effects from rising house prices.”

The IMF added that it now believes Australia’s Gross Domestic Product (GDP) is expected to hit pre-COVID levels by the March quarter of 2021, “limiting scarring effects” of the pandemic.

In relative terms, that means Australia is in particularly good shape compared to other countries that have been harder hit by the pandemic, with the IMF noting that in most other nations GDP is ­remaining “significantly below pre-pandemic trends”.

By comparison, the IMF forecasts Japan’s economy to grow by 3.3 per cent, Germany by 3.6 per cent and Italy by 4.2 per cent.

According to the IMF’s latest World Economic Outlook report Australia’s economy is expected to grow faster than anticipated. Picture: Saul Loeb/AFP

The IMF’s report also suggests that overall, the global economy is looking healthier than expected, with global growth being revised up by 0.4 per cent to 5.9 per cent in 2021 and by 0.2 per cent to 4.4 per cent next year.

“The latest IMF Economic Outlook confirms Australia’s strong economic performance in the face of the biggest economic shock since the Great Depression,” Treasurer Josh Frydenberg told The Daily Telegraph.

“While there is still a long way to go, Australians can see the light at the end of the tunnel as our economy outperforms all major advanced economies in the world.

“The jobs are coming back, business and consumer confidence has recovered to its pre-pandemic levels and our unprecedented $251 billion of direct economic support continues to flow.”

The good news underlined further positive news on the jobs front with the ANZ Bank reporting a massive leap in job advertisements over the past month.

According to the bank, total job ads grew 7.4 per cent in March from February to 190,542 — the highest number seen since November 2008 and a 39.7 per cent increase from the year prior, when much of the economy was ­beginning to shut down at the start of the pandemic.

“It is further positive news, further good news that demonstrates the comeback of the Australian economy,” Prime Minister Scott Morrison said, as he noted the jobs figures on Tuesday.

“What we are seeing is ­Australia continuing to move forward,” he said.