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Strong iron ore exports are expected to contribute to Australia’s strong recovery from the coronavirus pandemic recession.

In December,the OECD forecast Australia’s economy to grow by 3.2 per cent through 2021. Now it believes the economy will expand by 4.5 per cent before growing another 3.1 per cent through 2022.

The last time Australian GDP grew so quickly was between 2010 and 2011,when the economy emerged from the global financial crisis on the back of low interest rates and a mining construction boom that included iron ore,liquefied natural gas and coal.

The forecasts take into accountthis month’s national accounts,which showed the economy growing by 3.1 per cent through the final three months of 2020. Despite that expansion,the economy was still 1.1 per cent smaller than before the pandemic.

Globally,the OECD has also sharply lifted its forecasts.

In December,it was tipping global growth of 4.2 per cent in 2021 and then 3.7 per cent through 2022. Now,it is forecasting 5.6 per cent growth in 2021,followed by a 4 per cent expansion.

Part of the upgrade is due to the massive stimulus package being put in place by US President Joe Biden.

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.

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