NO.027

OECD ECONOMIC OUTLOOK 65 PROJECTIONS

The latest economic projections released today by the OECD acknowledge Australia’s

strong economic performance and project Australia to remain among the fastest growing

economies in the world, well exceeding the performance of the total OECD in both 1999 and

2000.

In light of the Asian crisis, the favourable assessment by the OECD for Australia can

be attributed to sound macroeconomic policies and ongoing microeconomic reform.

The OECD’s latest economic projections, along with an analysis of recent events in

the world economy, will be incorporated in the OECD’s Economic Outlook 65, which will

be published in June.

The OECD projections are broadly consistent with the forecasts contained in the

1999-2000 Budget. The OECD expects that GDP in Australia will grow by

3.2 per cent in 1999 and 3.4 per cent in 2000, underpinned by low

interest rates and a sound budget position. Inflation is expected to remain consistent

with the RBA’s medium-term target range. The current account deficit is projected to

fall from 5.2 per cent of GDP in 1999 to 4.7 per cent in 2000.

In terms of the global outlook, the OECD notes that “the economic situation for

the world and the OECD area as a whole now looks more favourable than it did six months

ago” and considers the balance of risks no longer to be clearly on the downside.

18 May 1999

Hong Kong