The OECD now expects global economic production to pass its pre-pandemic level by the middle of this year, six months faster than it had anticipated.
Treasurer Josh Frydenberg said the OECD’s forecasts showed the government’s economic plan was working.
“Australia’s performance on both the health and the economic front is world-leading, with our economy outperforming all major advanced economies in 2020 and as the OECD points out … our level of economic growth is closing in on our pre-pandemic level,” he said.
“The OECD outlook also shows Australians have amassed a high level of household savings which can be drawn on during the recovery and that consumer confidence is above the long-term average and well above that for the US, Euro Area, Japan and Germany.”
The OECD said the globe’s top priority remained producing and fully deploying vaccines as quickly as possible. It said lower-income countries would enjoy significant economic gains if they were given access to vaccines.
While the Australian economy is expected to grow strongly, there are still some doubts about how the jobs market will be affected as the Morrison government winds down its stimulus measures.
Analysis by Commonwealth Bank economists suggests up to 110,00 jobs could be lost when the JobKeeper wage subsidy program expires at the end of the month.
There are expected to be about 900,000 people reliant on the subsidy when it finishes, with economists Kristina Clifton and Nicolas Guesnon saying workers in transport, arts, recreation and hospitality are most at risk of losing their job.
They said some people would probably find work relatively quickly and so would not be counted as unemployed while others might actually leave the jobs market altogether for a short period.
The end of JobKeeper looked to be manageable at this stage, especially with key indicators such as the NAB’s business survey, which on Tuesday showed confidence at an 11-year high, pointing to ongoing strength.
“Our employment growth model, which incorporates these leading indicators, points to a continuation of solid employment growth in the near-term,” they said.
Shane is a senior economics correspondent for The Age and The Sydney Morning Herald.