Australia forecast to grow faster than most G7 nations

The news: Australia’s economy is forecast to grow faster than many advanced countries over the next two years, according to the IMF’s World Economic Outlook for July.

The context: The report said the global economy was being reshaped by the disrupted flow of oil and a surge in artificial intelligence investment. IMF staff predicted advanced economies would grow just 1.7% and 1.8% in 2026 and 2027, respectively. However, net energy exporters and countries with AI-related industries could do better. Australia slightly beat the average with a 1.9% growth forecast this year and 1.7% next year. While that is faster than every G7 economy except the United States, it is slower than some other advanced economies such as Korea and Spain.

What they said: Treasurer Jim Chalmers said Australia was well-placed to manage both the oil shock and the investment surge. “We have more fuel today than we had before the war and investment in AI infrastructure is booming, which contributed to CAPEX being six times higher than expected in the most recent quarter,” he said in a press release.