FEDERAL Treasurer Joe Hockey says the International Monetary Fund's latest outlook confirms the risks ahead for the Australian and global economy.
The latest World Economic Outlook downgrades Australia's growth rates by 0.5 percentage points from the previous April release, to 3 per cent this year and 3.3 per cent next year.
The IMF is more optimistic than the Reserve Bank of Australia, who in August issued a downgraded growth forecast of 2.25 per cent, the ABC reports.
The IMF also says Australia's unemployment rate is forecast to rise to 6 per cent next year, up from 5.2 per cent in April.
"Global growth is in low gear, the drivers of activity are changing, and downside risks
persis,'' the report says.
"China and a growing number of emerging market economies are coming off cyclical peaks. Their growth rates are projected to remain much above those of the advanced economies but below the elevated levels seen in recent years, for both cyclical and structural reasons.
"The United States has seen several quarters of solid private demand.
"Although public sector demand has been pushing in the opposite direction, this counterforce will diminish
in 2014, setting the stage for higher growth.
"Japan's economy is enjoying a vigorous rebound but will lose steam in 2014 as fiscal policy tightens.
"The euro area is crawling out of recession, but activity is forecast to stay tepid. In these three advanced economies, much slack remains and inflation pressure is expected to stay subdued.''