Echoing a research paper released by the IMF last week, the organisation also advised that Australia could reduce housing tax breaks to further stabilise the property market."The macro-financial resilience of the economy to housing market shocks could be enhanced through tax reform," it argued.That would help facilitate continued low interest rates, which the IMF said are still needed to support Australia's economy."Ensuring the return to full employment under weak global conditions will need continued accommodative monetary policy and quality infrastructure spending, which will also boost long term growth potential," it noted.The IMF observed that, obviously, the UK and European economies would be hit hardest by Britain's decision to leave the EU.Britain is expected to grow 0.2 of a percentage point slower this year than was forecast prior to the Brexit outcome, while 0.9 of a percentage point has been slashed off next year's forecast.
However, the global financial agency said that it would have actually raised its global growth forecasts were it not for the Brexit vote."The Brexit vote implies a substantial increase in economic, political, and institutional uncertainty, which is projected to have negative macroeconomic consequences, especially in advanced European economies," noted the IMF in its latest World Economic Outlook Update.
But the IMF warns that outcomes could prove deeper in the negative.