The IMF’s new report on Australia is out and pretty much endorses everything official with the now regular warning about the offshore funding vulnerability in the banking system. The section on current account deficits is interesting, too, with a medium term forecast of 6% and worse if government misses its surpluses (which means it will be worse).
One wonders in this post-GFC world what the tolerance for Australian current deficits will be in global markets. It’s not something I’d recommend testing.
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