The Crest of the Commonwealth of Australia Treasury Portfolio Ministers
Picture of Wayne Swan

Wayne Swan

Deputy Prime Minister and Treasurer

3 December 2007 - 27 June 2013

28 November 2012

OECD Economic Outlook 92 — November 2012

The OECD Economic Outlook released overnight again confirms the resilience of the Australian economy in the face of challenging global conditions.

The Outlook confirms that, unlike most other OECD economies, Australia's economic fundamentals remain strong, with solid growth, low unemployment and contained inflation. 

Along with the IMF, the OECD expects our economy to outperform every single major advanced economy – and the OECD as a whole – over the next two years. In 2013 alone, Australia's growth is expected to be more than double the average for OECD economies.

The OECD forecasts Australia's economy to grow by 3.7 per cent this year, 3 per cent in 2013 and 3.2 per cent in 2014, consistent with the forecasts contained in the Mid-Year Economic and Fiscal Outlook.

The OECD has downgraded its forecasts for the global economy, which is expected to grow by 3.4 per cent in 2013 and 4.2 per cent in 2014. The OECD also highlights significant downside risks to the global outlook, particularly from the euro area crisis and the looming US ‘fiscal cliff'.

The OECD area as a whole is expected to record GDP growth of 1.4 per cent in 2013 and 2.3 per cent in 2014, with emerging economies continuing to drive the vast majority of global growth.

The Australian economy has now completed 21 years of economic growth, more than twice as long as any other advanced economy.

While some sectors continue to face headwinds from a strong dollar and weak global demand, the OECD expects that Australia's economic growth will be underpinned by strong investment, solid consumption and a lift in export volumes.

Despite the recent decline in the terms of trade, the OECD expects that the mining sector will expand "vigorously" in 2013, continuing to boost the export capacity of the economy. Specifically the OECD notes that:

"Mining investments should continue to expand vigorously in 2013 in view of announced plans. Furthermore, export growth should gather pace with the expansion of mining capacities, and the expected improvement in the external environment in 2014."

The OECD expects Australia's unemployment rate to remain low at 5.5 per cent in 2013, substantially lower than the 8.2 per cent unemployment rate expected for the OECD and less than half of the 11.9 per cent forecast unemployment rate in the euro area. 

Australia's stand-out jobs record is a testament to the Government's actions during the worst global downturn since the Great Depression, when Labor acted to save jobs and avoid recession.

Since 2007, more than 800,000 jobs have been created in Australia at the same time as millions of jobs have been lost in other advanced economies.

While we recognise that not everyone is on easy street, and some sectors of the economy face big challenges like the high dollar, this report from the OECD confirms our economy remains very resilient in the face of global headwinds, unlike most other advanced economies.

We also have low interest rates - today at 3.25 per cent the official cash rate is lower than it was at any time under the last Liberal government - and less than half the level it was when they left government.

Since November, there's been the equivalent of six official interest rate cuts and the benefits of lower rates are flowing through to Australian families and businesses.

A family on a $300,000 standard variable mortgage is saving around $4,500 a year in repayments compared to what the Liberals saddled them with when they left office.