Treasurer Josh Frydenberg and IMF chief economist Gita Gopinath (Images: AAP, AP)

While Australia managed one of the most impressive economic performances in the world in 2020 -- not much of a boast, true, but significant nonetheless -- it seems the government's twin crackdowns on spending and wages are going to pull us back to the economic pack this year. At least according to the International Monetary Fund (IMF).

The IMF's latest World Economic Outlook out this week showed Australia outperforming most developed economies in 2020 with growth of -2.4%, compared to less than -5% in Europe and -4% in the US. Most of that is down to Australia being isolated, the states' mostly effective lockdowns and contact tracing, and the Morrison government's highly effective fiscal support via JobKeeper, JobSeeker and the HomeBuilder program, as well as the aggressive loosening of monetary policy by the Reserve Bank.

But this year and next are shaping up as less than stellar: the IMF sees us growing 4.5% this year and 2.8% in 2022. That compares to global growth of 6% this year, 4.5% and 4% for Western Europe, 6.4% and 3.5% for the US and more than 5% both years in the beleaguered UK. Most of these forecasts have been upgraded -- the US forecast was raised by 1.3 percentage points from the IMF’s 5.1% 2021 projection in late January and is now nearly double the rate estimated last October, when the Trump administration was destroying the United States every way it could.