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IMF Country Report No. 24/361
AUSTRALIA
SELECTED ISSUES
December 2024
This paper on Australia was prepared by a staff team of the International Monetary Fund as background documentation for the periodic consultation with the member country. It is based on the information available at the time it was completed on November 13, 2024.
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© 2024 International Monetary Fund
Title Page
AUSTRALIA
SELECTED ISSUES
November 13, 2024
Approved By
Asia and Pacific Department
Prepared by Monica Petrescu, John Spray, and Sneha Thube, with contributions from Jaden Jonghyuk Kim and Alice Tianbo Zhang and guidance from Florence Jaumotte, and Pritha Mitra.
Contents
MONETARY POLICY TRANSMISSION IN AUSTRALIA
A. Is the Current Australia Monetary Tightening Cycle Different?
B. Transmission via the Housing Channel
C. Transmission via Corporate Balance Sheets
D. Conclusions
FIGURES
1. Policy Rates and Inflation
2. Evolution of Macroeconomic Variables
3. Labor Market and Financial Indicators
4. Policy Rates and Inflation in Advanced Economies
5. Growth and Unemployment in Advanced Economies
6. Heterogeneity in Monetary Policy
6. Heterogeneity in Monetary Policy Transmission to Households
7. Mortgage Rates and Repayments
8. Evolution of Firm Earnings after a Monetary Policy Shock
9. Evolution of Investment after a Monetary Policy Shock
10. Heterogeneity in the Evolution of Investment after a Monetary Policy Shock
11. Corporate Balance Sheets in the Current Tightening Cycle
12. Cash Holdings
13. Balance Sheet Characteristics at the Start of the Current Cycle
TABLES
1. Monetary Tightening Cycles
ANNEX
I. Data and Methodology
References
GLOBAL AND DOMESTIC ENERGY TRANSITION RISKS: AUSTRALIA
A. Introduction
B. Context on Exposed Industries in Australia
C. Methodology & Data
D. Economic Implications of Australia’s Domestic Energy Transition
E. Economic Implications of the Global Energy Transition
F. Potential Mitigating Factors
G. Conclusions
FIGURES
1. Global Fossil Fuel Demand Is Set to Shift During the Energy Transition in Unpredictable Ways
2. Drivers of the Energy Transition
3. Australia’s Resource Sector
4. Implications of the Domestic Transition
5 Global Coal Demand
6. Impacts of the Global Energy Transition
7. Potential Mitigating Factors
ANNEXES
I. IMF-ENV
II. Additional Figures
References