The International Monetary Fund (IMF) has upgraded Australia’s economic growth outlook in its latest World Economic Outlook. Amid continued “high uncertainty” globally, the IMF has confirmed our economy is recovering from the COVID-19 crisis faster and stronger than previously expected.

Australia’s economy is forecast to grow by 4.5 per cent in 2021, one percentage point higher than the IMF’s interim outlook in January. The IMF then expects economic growth to reach 2.8 per cent in 2022, broadly consistent with its earlier projection.

In upgrading its outlook, the IMF notes that the “Australian economy continues to show a strong recovery momentum” and that a “favourable labour market recovery continues to support a strong rebound in private consumption, added by wealth effects from rising house prices”.

Australia’s GDP is “projected to reach the pre-COVID level by the March quarter 2021, limiting scarring effects of the pandemic” and compares favorably internationally with GDP remaining “significantly below pre-pandemic trends in most countries”.

These forecasts follow the Morrison Government’s unprecedented response to the crisis, providing $251 billion in direct economic support that has helped to keep businesses in business and Australians in jobs.

Australia also continues to compare remarkably well to other nations, with the IMF forecasting Japan’s economy to grow by 3.3 per cent, Germany by 3.6 per cent and Italy by 4.2 per cent.

Encouragingly, global growth has also been revised up by 0.5 percentage points to 6.0 per cent in 2021 and by 0.2 percentage points to 4.4 per cent in 2022.

The next stage of the Government’s Economic Recovery Plan will support private sector activity through a number of measures including tax cuts, unprecedented business investment incentives, record levels of investment in skills and training, infrastructure and targeted support for the aviation and tourism sectors.

These household and business incentives will help to unlock the more than $240 billion of savings accumulated throughout the pandemic and sitting on private sector balance sheets.

Having outperformed all major advanced economies on the economic front in the last 12 months, there is no other country you would rather be in than Australia.