IMF puts Australia among the worst in the rich world for rising unemployment and inflation, as the RBA keeps more rate rises on the table
Australian outlets reported on Tuesday that the IMF’s latest forecasts put Australia near the bottom of the developed-world table for unemployment and inflation. The Herald and The Age said the rise in the jobless rate would be the biggest among advanced economies; the AFR and Nine.com.au said it would be among the worst, alongside one of the worst inflation outlooks. The same coverage said the economy would keep growing next year while the number of people out of work climbs. The Australian reported the Fund urging a renewed focus on debt and deficits to fight inflation. Separately, the Reserve Bank’s minutes, published on Tuesday, said further rate rises are possible if required (News.com.au, Daily Telegraph, NT News, CommBank). The Guardian reported an IMF scenario with oil at US$130 a barrel that could add 30 cents a litre to petrol. We did not confirm any forecast figure from two sources.
Unemployment and inflation decide how much pain the Reserve Bank is willing to accept. If the Fund is right that jobs weaken while prices stay high, the bank faces a harder choice: raise rates and cost jobs, or hold and risk inflation settling higher. The forecast also bears on the federal budget, since the Fund’s advice leans on debt and deficits.
If you have a variable-rate mortgage, the minutes are a reminder that further rises have not been ruled out; The Australian pointed to November for the next decision. If you are job-hunting or running a business, the forecast says hiring conditions soften next year. Petrol is the other exposure, but the Guardian’s 30-cent figure belongs to a stress scenario, not the central forecast.
The Fund’s message is a fair warning: Australia’s inflation fight has been slower than in peer economies, and fiscal restraint should share the load with interest rates.
A ranking of rises flatters economies that start from a low base, a growing economy is not a recession, and it is higher rates, not government spending, that households feel first.
Respect the direction and doubt the ranking. Without the numbers we cannot say how large the gap is, and “biggest rise” is not “highest rate”. The direction is harder to dismiss, because the RBA’s own minutes say weaker growth is the price of beating inflation. Watch three things: the exact IMF tables once they are read in full, the November RBA decision, and whether oil moves toward the US$130 stress case.
DailyDrop Australia edition No. 10 · Morning · WED., OCT. 14, 2026