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 Treasurer, Wayne Swan, said this update is consistent with the reasons he has given for bringing the budget back to surplus, and criticised Tony Abbott for "talking down the economy".
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 the Australian economy will outstrip growth over all other advanced economies over the next two years, 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.
Mr Swan will attend a meeting of the G20 finance ministers in Washington this weekend, with appointments scheduled with IMF managing director Christine Lagarde, the outgoing president of the World Bank, Robert Zoellick, and the chairman of the US Federal Reserve, Ben Bernanke.
Mr Swan said the latest global outlook update was consistent with the reasons he had consistently given for bringing the budget back to surplus.
The IMF also forecasts Australia's unemployment rate to remain low at 5.2 per cent in both 2012 and 2013.
"The IMF also forecasts Australia's unemployment rate to remain low at 5.2 per cent in both 2012 and 2013," he said.
"With solid growth, low unemployment, contained inflation, strong public finances and a record pipeline of business investment, the Australian economy is the standout performer of the developed world."
Mr Swan said that the chance of the Reserve Bank cutting interest rates was greatly increased by a budget surplus.
"The IMF's confirmation of Australia's strong economic fundamentals - with solid growth and low unemployment - further underscores the importance of returning the budget to surplus, and giving the Reserve Bank maximum flexibility to cut interest rates if it considers that is necessary," he said.
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.
Mr Swan tweeted from the tarmac before taking off for Washington that it was ''crucial Tony Abbott stops talking down the Aussie economy – describing us as 'underperforming' despite big tick from IMF this morning''.
Follow the National Times on Twitter: @NationalTimesAU