The Reserve Bank of Australia should lift rates if local mining investment boom continues to be Australia's main economic driver, the International Monetary Fund (IMF) has said in a report published Thursday.

Australia's economy has benefitted from China's stronger demand for raw materials, but "should the recovery unfold as expected, monetary policy will need to tighten further to contain inflation pressures generated by the mining boom," the IMF said.

The Washington-based organisation warned that although Australia was in a better position, it is still exposed to the global recession. As such, the country should use any improvements in revenue to help prevent potential overheating of the mining boom.

The RBA already announced it is ready to increase its policy interest rate if the nation's economic strength continues to point to higher inflation.

Investors have increased bets this month that RBA Governor Glenn Stevens will resume the most aggressive round of interest rate increases on October 5.

Speculation the bank may resume rate increases this year intensified after reports this month revealed business confidence soared in August to the highest level in four months and employers added 30,900 workers, pushing the jobless rate down to 5.1 percent, the lowest level since January 2009.

The IMF said it expects Australian GDP, led by mining investment and commodity exports, to rise by 3 to 3.5 per cent between 2010 and 2011.