Australia’s new Liberal-National coalition government and the IMF share a common belief. Along with four other APEC countries with current account deficits exceeding 3.25% of GDP, Australia can no longer avoid tightening her fiscal and monetary policies.
At US$21 billion, Australia’s current account deficit is now running at 4.5% of GDP. And a huge budget deficit is on the horizon. The treasury has already revised its estimates for economic growth downwards, but this has meant that, free of asset sales, the budget in 1996-97 will run at a deficit of A$4.9
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