The International Monetary Fund has upgraded its global growth forecasts

Colin Brinsden, AAP Economics Correspondent
(Australian Associated Press)

The International Monetary Fund has upgraded its global growth forecasts again but bad weather events have meant Australia has failed to live up to earlier expectations.

Releasing its latest World Economic Outlook in Washington, IMF economic counsellor Maurice Obstfeld says the global recovery is continuing and “at a faster pace”.

“We see an accelerating cyclical upswing boosting Europe, China, Japan and the United States, as well as emerging Asia,” he said.

By contrast, the IMF expects economic growth in Australia to slow to 2.2 per cent in 2017 compared to 2.5 per cent in 2016 – a downgrade from the 3.1 per cent it predicted for this year in April.

“Growth is expected to soften temporarily to 2.2 per cent in Australia, where housing investment and mining exports in the first half of the year were undermined by bad weather,” the report says.

It means unemployment is expected to remain at its present level of 5.6 per cent for this year, rather than falling to 5.2 per cent as earlier envisaged.

However, the economy is expected to grow by 2.9 per cent in 2018, which should help reduce the jobless rate to 5.4 per cent.

The Washington-based institution now expects the world economy to grow by 3.6 per cent this year and 3.7 per cent in 2018, both 0.1 percentage points higher than previously predicted in July.

That compares with 3.2 per cent growth in 2016.

Dr Obstfeld said the global acceleration is notable because it is broad-based, more so than at any time since the start of this decade.

“This breadth offers a global environment of opportunity for ambitious policies that will support growth and raise economic resilience in the future,” he said.

“Policymakers should seize the moment.”

Treasurer Scott Morrison will attend the IMF and World Bank annual meetings in Washington on October 13-14.

He will also participate in the G20 finance ministers and central bank governors meeting on October 12-13.

“These meetings are an opportunity to discuss some of the emerging positive trends in the global economy and the better days that are ahead,” Mr Morrison said in a statement.

He will hold a number of bilateral meetings, including with his counterparts from the US, Singapore, South Korea and PNG.

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