Brief
IMF warns Australia’s unemployment could rise to 800,000 by 2027
The IMF’s latest outlook predicts Australia’s unemployment will increase despite strong growth and falling inflation.
By Felo News Desk · Published
Australia faces the biggest rise in unemployment among developed nations next year, the International Monetary Fund warned on Tuesday in its six‑monthly economic outlook.
The IMF projects the unemployment rate to climb from 4.4% in 2026 to 4.7% in 2027, translating to close to 800,000 Australians out of work. The forecast comes as the country’s economy is expected to grow 1.9% this year and 1.6% in 2027, slightly lower than the IMF’s April outlook.
Inflation is forecast to ease from 4.7% in 2026 to 4.1% in 2027, while global growth is projected at 3.1% this year and 3.4% in 2027. Only the United States, Spain, Singapore and New Zealand are expected to outpace Australia’s growth.
IMF chief economist Silvana Tenreyro said the global economy had survived an “exceptional sequence of events” over the past seven years, including the pandemic, supply‑chain disruptions, wars in Ukraine and Iran, and challenges to the trading system. She added that recent resilience is under strain, warning that without “shoring up supply capacity and replenishing policy buffers, the global economy could soon test the limits of resilience.”
Tenreyro noted that the recent surge in oil prices would normally have hurt growth, but a combination of inventory draw‑downs, new supply routes and a rapid lift in renewable energy had mitigated the impact. She cautioned that the same factors, together with an AI‑driven construction boom, now pose a risk if supply capacity does not keep pace.
Despite the projected rise in joblessness, Australia’s unemployment rate would remain lower than Britain’s 5.3%, Sweden’s 8.1% and Canada’s 6.3% in 2027. The IMF also expects the higher unemployment to help bring inflation down from 3.9% in 2026 to 3.1% in 2027, leaving Australia with relatively modest price pressures compared with Austria and Greece.
Key facts
- The IMF forecasts Australia’s unemployment rate to rise to 4.7% by 2027, about 800,000 people. (smh.com.au)
- Australia’s economy is projected to grow 1.9% in 2026 and 1.6% in 2027. (smh.com.au)
- Inflation is expected to fall from 4.7% in 2026 to 4.1% in 2027. (smh.com.au)
- IMF chief economist Silvana Tenreyro warned that global resilience is under strain. (smh.com.au)
Sources
- [1] smh.com.au — originally reported as “Australia unemployment rate: IMF warns nation faces biggest jobless rate spike of developed world”
