Worse than Greece: Dire state of the Australian economy is laid bare in alarming report that finds it will soon be weaker than the struggling European country
- International Monetary Fund expects Australia’s economy to lag behind Greece
- It forecast 1.7 per cent pace for 2019 in Australia versus two per cent for Greece
- The IMF is also worried about trade war between the United States and China
- It bailed out Greece twice as its debt levels, unemployment surged during GFC
The dire state of the Australian economy has been exposed with an alarming report predicting it will lag behind Greece this year.
The International Monetary Fund is so downbeat about Australia it has downgraded its growth forecasts for 2019 – expecting it to do even worse than a European nation on the Mediterranean with a debt crisis.
In April, it predicted Australia’s economy would grow by 2.1 per cent.
On Tuesday night, it downgraded that forecast to 1.7 per cent.
The International Monetary Fund is so downbeat about Australia it has downgraded its growth forecasts for 2019 – expecting it to do even worse Greece (pictured is Sydney Harbour)
By comparison the IMF, which bailed out Greece twice, is expecting the Greek economy to grow this year by two per cent.
Australia’s economy is already growing at the slowest pace since the global financial crisis a decade ago.
Put another way, the existing growth pace of 1.4 per cent for the year to June 30 is less than half the long-term average of 3.2 per cent between Australia’s last recession in 1991 and 2018.
Making matters worse, the IMF is also expecting the world economy to slow down this year to three per cent – the worst since the GFC.
In April, it predicted Australia’s economy would grow by 2.1 per cent. On Tuesday night, it downgraded that forecast to 1.7 per cent. By comparison, it is expecting the Greek economy to grow this year by two per cent (pictured is the view from the Acropolis in Athens)
It hinted the trade war between the United States and China, Australia’s biggest trading partner, would drag down global economic activity.
‘This subdued growth is a consequence of rising trade barriers; elevated uncertainty surrounding trade and geopolitics,’ the IMF said.
The Reserve Bank of Australia this month cut interest rates for the third time in four months, taking the cash rate to a new record low of 0.75 per cent.
The IMF expected the Australian economy to grow by 2.3 per cent in 2020 compared with 2.2 per cent for Greece.
After the GFC, Greek debt became so bad it needed the IMF to bail it out twice , in 2010 and 2012. The European Union financed a third bailout in 2015, after previously co-funding bailout packages with the IMF.
The Greek government’s debt was so high it was unable to borrow on the bond market to finance its welfare programs.
In 2013, Greece’s unemployment rate surged to 27.5 per cent – a level more than five times Australia’s current jobless level of 5.3 per cent.
There were also fears the 19 nations in the Eurozone would collapse.
Economic woes in Greece also led to the hard-left Syriza coalition of Marxist parties coming to power in 2015, as voters and protesters railed against IMF austerity measures.