As the Morrison government puts together a stimulus package to offset the impact of the coronavirus close, the International Monetary Fund has given it a pat on the back for its “sound macroeconomic management”.

But concluding its annual assessment of Australia, the IMF also warns that downside risks to the near-term economic outlook “remain elevated” and have recently increased due to the COVID-19 outbreak.

“Growth should continue to recover in 2020, but it will take time for the economy to return to potential and restore inflation to within the (two to three per cent) target range,” the Washington-based institution said in a statement.

However, the annual report was concluded on February 21, and is already looking somewhat dated given world markets have since been extremely volatile as the coronavirus spreads and central banks, including the Reserve Bank, have cut their key interest rates fearing a global downturn.

But Treasurer Josh Frydenberg, responding to the IMF report, believes Australia is approaching the challenges ahead from a position of “economic strength”.

In the report, the IMF forecasts economic growth rising to two per cent in 2020 from 1.8 per cent in 2019, before rising to 2.4 per cent in 2021.

But Treasury secretary Steven Kennedy told a Senate estimates hearing on Thursday, COVID-19 will lop at least 0.5 percentage points off of growth in the March quarter of this year.

This is on top of the expected 0.2 percentage point detraction caused by this summer’s devastating bushfires.

It is also unclear at this stage what impact the virus will have beyond March.

The government is keeping the make-up of its stimulus package close to its chest, including the exact time of its announcement, although Finance Minister Mathias Cormann helpful says it will be “well before” the May budget.

The package is expected to be a multi-billion dollar affair aimed at keeping business doors open and people employed.

“We are obviously making decisions to ensure that we keep the economy growing and we put ourselves in the best possible position for the strongest possible recovery, ” Senator Cormann told Sky News on Friday.

There have been calls for the government to increase Newstart as a way to inject money into the economy.

Labor and business groups have also suggested bringing forward future tax cuts that have already been legislated.

But Senator Cormann declined to speculate what the government may or may not do.

Tourism ministers were meeting in Canberra on Friday to discuss the impact of the virus on the sector.

The government last week added Iran to the ban and South Korean visitors on Thursday. It also introduced enhanced screening for travellers from Italy.

Dr Kennedy also warned the bushfires and the emergence of the virus will undoubtedly have a negative impact on the budget position.

In the mid-year budget review in December, Treasurer Josh Frydenberg forecast a $5 billion surplus, which would have been the first in a decade.