AUSTRALIA is set to soar out of its economic downturn sooner and more sharply than forecast in the budget, according to forecasts from the Organisation for Economic Co-operation and Development understood to have the backing of the Australian Treasury.
The OECD says the local economy should shrink 0.3 per cent this year, less than any other OECD economy and far less than the contraction of 1 per cent that underlies the forecasts in the May budget.
Next year the economy should roar back 2.4 per cent, also above budget forecasts and more than any other OECD economy apart from those recovering from collapse in 2009.
The OECD identifies China as the driving force behind the global recovery, crediting "massive government stimulus" measures with lifting expected growth there this year from 6.3 per cent to 7.7 per cent and to 9.3 per cent next year.
The report says the Rudd Government needs to "maintain the expansionary thrust" of its policy. "Despite relatively favourable developments" Australia's conditions "remain fragile" with a further downturn likely this year.
Full Report…
Peter Martin Economics Correspondent June 25, 2009
