So why didn’t the morning newspapers use the OECD mid-year economic forecast update?

With the exception of the Fairfax broadsheet’s Peter Martin, the others seemed to prefer colour and movement of the resource rent tax argument. The Australian buried a Wall Street Journal report on the broad OECD forecasts in its business section. No mention of Australia, or relevance, apart from recording the forecast.

The reason for this reticence possibly can be found in the forecasts for Australia: they are solid, in keeping with those in the Budget and from the Reserve Bank. You can bet that if there had been a difference, The Australian and The Australian Financial Review would have been climbing all over the story in with “new economy shock” stories.

Perhaps it came late, but it was out after 7  o’clock (Sydney time) last night in Europe, with federal Treasurer, Wayne Swan sending his spin just after 8.15pm.

So, for the record, the OECD said that Australia will see strong growth this year and next, above its trend rate.

“Activity might expand by as much as 3.25% and 3.5% in these two years, driven by booming exports and domestic demand.

“The unemployment rate is expected to fall below 5% by the end of 2011, in a context of moderate inflation.

“Managing the exit strategy from the crisis is less problematic in Australia than in most OECD countries. The current tightening of monetary and fiscal policy is welcome given the rebound in activity.

“To maintain robust and balanced growth in the medium term, the economy’s supply capacity must be strengthened, including in the real estate sector where demand, bolstered by immigration, is expected to remain strong.”

”The business climate and business confidence are strong. Firms have significantly expanded their investment plans, particularly in the mining sector, where strong demand from Asian countries has led to marked improvement in the terms of trade and higher profits,” the OECD said. That’s right in line with the RBA and the government.

Looking at the rest of the world the most striking points remain the importance of China to solid world growth, and the irrelevance of Europe. The recovery is leaving it behind and the continuing debt worries will see it fall further behind, especially as government spending cuts hit home.

Those debt worries bumped US markets and confidence this morning when the Financial Times reported  that the Chinese government’s key investment groups were getting worried about the safety of eurobonds and calling in Western banks to discuss their concerns. Down went Wall Street, the euro and the Aussie dollar in late trading.

China remains vital for the globe: without it and the growth for the 31 members of the OECD will be 2.7% this year, and 2.8% in 2011, more than the 1.9% and 2.5% forecast last November.

Including China, the global economy will expand 4.6% this year and 4.5% in 2011, compared with an average of 3.7% during the decade through 2006. Last November it predicted growth of 3.4% for 2010 and 3.7% next year. China’s growth is forecast at 11.1% in 2010 and 9.7% next year, both higher than the November forecasts of 10.2% in 2010 and 9.3% next year.

In the US, growth is projected to rise by 3.2% this year and 3.2% in 2011. Japanese GDP is expected to expand by 3.0% in 2010 and by 2.0% in 2011.

But euro area growth is forecast at 1.2% this year and 1.8% next year, but that is at least a touch better than the last forecast of  0.9% and 1.7%.

And the best part about the report is that the OECD reckons global unemployment has probably peaked at current levels (8.5% in the OECD’s member countries), compared with previous forecasts of a peak of about 10%. But the 2011 forecasts are not high enough to drive unemployment much lower. It will be a long process to get meaningful reductions in jobless numbers in the US and across Europe.