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Economy Scores Top Marks

It's not just swimming and cricket that Australia does well at, it seems our economy scores top marks against the rest of the world. According to the Reserve Bank, the Australian economy is in "better shape than most" and "will remain one of the better performing economies in the developed world".

Compared to the United States and the UK, where cash rates sit at a range of 0-0.25% and 0.5% respectively, Australia still has significant room to move with monetary policy. While there is no guarantee this will insulate us from the worldwide recession, it does put us in a good position to benefit from the renewed global expansion when it comes.

Experts are now predicting 2010 as the year most likely to bring about the start of the global upswing. The International Monetary Fund and the US Federal Reserve anticipate that fiscal measures put into place now by the world economies will go a long way towards stimulating this turnaround.

G20 Summit leaders recently agreed on a $US1.1 trillion plan for recovery and reform, which adds up to a staggering $US5 trillion spent in stimulus measures this year and next.

Australia's own stimulus plan and recent injection of cash bonuses is well underway, and when coupled with the positive impact of interest rate cuts, many are hopeful that our economy may well hit a home run.