IMF Asia-Pacific director Krishna Srinivasan said inflationary pressures are rising due to a global surge in food and fuel costs caused by the war in Ukraine
The downbeat report comes a day before recently appointed Treasurer Jim Chalmers updates the previous government's budget forecasts
The nationwide core consumer price index (CPI), which excludes volatile fresh food costs but includes those of energy, rose 2.2% in June from a year earlier
President Joe Biden is unlikely to announce a decision until after he speaks to Chinese leader Xi Jinping - a planned call that is yet to be scheduled, his chief spokeswoman said
The consumer price index grew by a slightly faster-than-expected 6.0% in June over a year earlier, the highest since November 1998, data showed on Tuesday
He said that without the Chinese market - which accounted for 3.3 million VW sales last year, including its electric ID.4 model - inflation would explode
Bank for International Settlements advised that interest rates should be raised "quickly and decisively" to prevent the surge in global inflation turning into a bigger crisis.
Inflation at the retail level has remained above the central bank's tolerance band of 2-6% for five months in a row, even though it eased marginally in May
China's markets are being buoyed by policy easing exactly as much of the rest of the world is tightening, says Goldman Sachs.
One risk is that export bans by countries that rely heavily on food imports could prompt neighbours to retaliate, an analyst told the Times