Australia has the strongest economy in the developed world and it is expected to outperform all comers for at least the next two years, according to the International Monetary Fund.

 
The IMF - which issued its World Economic Outlook in Washington overnight - said it expected the Australian economy to expand by 3 per cent this year as fiscal tensions from Europe and the United States continue to ease.

The body stated that after a major setback last year with the Eurozone crisis, the global prospect of far more stable financial conditions was gradually improving.

The update said that it expects , noting we live in a region where exposure to troubled European banks was less than for other parts of the world.

But it also warned that Australia was exposed to risk if economic conditions in the Middle East caused another oil price spike.

The organisation revised up its global growth forecasts, with the global economy expected to grow by 3.5 per cent in 2012, up from 3.3 per cent in the January update.

A forecast of global growth of 4.1 per cent in 2013 has also been revised up from 3.9 per cent.

Global growth continues to be underpinned by solid growth in Asia, the report said.

China's economy was expected to grow 8.2 per cent in 2012 and 8.8 per cent in 2013, while India was expected to grow 6.9 per cent in 2012 and 7.3 per cent in 2013. These forecasts were broadly unchanged from the IMF's January update.




The government has hit out at Opposition leader Tony Abbott for ''getting it wrong'' on the IMF growth forecasts.

During a morning doorstop, Mr Abbott said the IMF report showed the local economy was ''underperforming'', as they had downgraded the economic growth forecast.

''It forecasts 3 per cent for the current financial year and it looks like we are going to get 2 per cent,'' Mr Abbott said.

''This is an underperforming economy and it's underperforming because of the poor economic management of the current government.''

But Mr Abbott's assertion was not correct, according to a spokesman for the Treasurer, who said the growth forecast of 3 per cent in 2012 had been the same since the start of the year.

So, regardless of where you want to give the CREDIT ( ... or lay the BLAME) for the current Australian economic climate, we agree on at least ONE TRUTH

The Organisation for Economic Co-operation and Development (OECD) says the Australian economy is expected to grow at a faster rate than most other advanced economies in 2012 and 2013.

It predicts that Australia's economy will grow at 3.1 per cent in 2012 and 3.7 per cent in 2013, and welcomes the Federal Government's commitment to delivering a budget surplus.

But the organisation warns that the crisis in the eurozone poses the single largest risk to the global economy.

The organisation has endorsed the Government's plan to boost its cash reserves while the economy is strong and demand for resource exports is still high, and says lowering interest rates will help offset any negative impact of budget tightening.

In the budget handed down earlier this month, the Federal Government forecast growth of about 3.25 per cent slowing to 3 per cent.

Federal Treasurer Wayne Swan says the report confirms yet again that

Australia is the stand-out performer on the global stage.

"It's consistent with the fact that we have got

solid growth

,

long unemployment

,

contained inflation

,

strong public finances

and a

record pipeline of business investment

in resources," he said.

"I think it is good news. I mean, Australia has a triple-A credit rating from the three major credit rating agencies"

Global implications

The report warns that a failure to act immediately could lead to a worsening European crisis with serious global consequences.

In November, the OECD warned if the eurozone did not tackle its debt crisis, there could be a deep recession with global implications.

Six months on, the organisation says these immediate dangers have receded somewhat, but have not disappeared.

The OECD predicts

By contrast,
The OECD also expects

MANY families may be struggling to make ends meet but a new report says

we are much better off than in previous decades.

The latest AMP.NATSEM Income and Wealth Report shows Australian household income is outpacing the cost of living over the longer term, with disposable incomes increasing 20 per cent over the last 27 years.

It says the average family is better off by $224 per week in real terms

.

But the report points out that since 1984 the cost of living has skyrocketed with everyday essentials such as electricity (up 253 per cent), petrol (208 per cent) and public transport costs (287 per cent) all soaring.

But those rises have been partially offset by dramatic drops in audio visual and computing, which now cost one tenth what they did in 1984, while average prices for clothing, footwear and major household appliances have changed little, and are often lower today than 27 years ago.

AMP Financial Services managing director Craig Meller said the report shows households today are more focused on lifestyles and aspirations than they were in the 80s.

"Many Australians are leading busier lives and facing greater demands on their time, which means we're now paying for things we may not have previously, such as childcare, gardening and housekeeping," Mr Meller said.

"We've also seen a noticeable shift in spending habits with people

spending more on education, holidays and eating out

.

"Essentially we seem to be leading bigger lifestyles, all of which can add to

perceived cost of living pressures

"

The report says incomes have outpaced the cost of living across the board since 1984 and couples with children have seen their income grow by 37 per cent, single parent incomes have grown 34 per cent, and working families 22 per cent.

Expenses for secondary students have grown by 264 per cent, mostly attributed to higher private school fees.

Maintaining good health has not come cheap either - medical, dental and insurance costs have increased at even greater rates, jumping 560 per cent, 356 per cent and 346 per cent respectively.

And if think petrol prices are outrageous, think again because we are amongst the lowest in the developed world.
Only Canada, the United States and Mexico have cheaper petrol prices.

Australia's average unleaded petrol price of around $1.40 per litre is significantly cheaper than most European countries where petrol can cost more than $2 per litre.

Unsurprisingly, Sydney is the most expensive city in Australia, and Adelaide is the cheapest.

Abbott is an economic illiterate.