IMF: Australia's debt very low

The IMF is urging the high public debt developed nations to reduce their net debt to levels of 60 per cent of GDP. Without this fiscal adjustment it has warned that they face adverse macroeconomic consequences. IMF research has found that if the G7 countries do not take measures to rein in their debt levels their interest rates could rise by two percentage points and potential growth could be half a per cent lower. This could also have a detrimental impact on the world economy and affect even low debt countries such as Australia.

Conclusions
In sum, Australia has negligible levels of debt (see graph) which pose little threat to the country’s economic outlook. However, Australia could be affected by the international implications posed by the G7.

General government net debt 2010

Excludes Norway, Sweden and Chile which have negative net debt.
(a) Australia refers to financial year 2009–10. Figures from 11 May Budget.
Sources: International Monetary Fund, Fiscal monitor: navigating the fiscal challenges ahead, 14 May 2010; and Treasury, Budget strategy and outlook, Budget paper no. 1, 2010–11.