actual numbers are shown in table 1, which uses calendar year 1990 as the base and shows the average growth rate up to the most recent quarter ( march quarter 2002 ). note that by using 1990 as the base, we include the early nineties recession for all countries in the average, as well as the later expansion. the exceptions are ireland and luxembourg. table 1 real gdp growth ( annual rate, per cent ) 1990 - current * australia 3. 4 norway 3. 0 united states 3. 0 canada 2. 7 netherlands 2. 6 new zealand 2. 6 portugal 2. 6 spain 2. 6 austria 2. 4 united kingdom 2. 2 denmark 2. 1 belgium 2. 0 finland 1. 9 france 1. 8 germany 1. 6 sweden 1. 6 italy 1. 5 japan 1. 1 switzerland 0. 9 * greece, iceland, ireland and luxembourg not included due to data limitations. part of our stronger growth can be explained by faster population growth, but we also have put in an excellent productivity performance over the decade as well. in the work done by the federal reserve board in the united states and by the oecd in paris, australia is identified as one of the group of countries that has increased its rate of productivity growth ( whether measured by labour or multi - factor productivity ) in the nineties compared with the eighties. chart 1, which is reproduced from the oecd, shows australia is second only to finland in its acceleration in multi - factor productivity. the trends i have mentioned are not confined to the 1990s, although that was clearly our best decade in terms of relative advance. if we look at the broader picture over the past 20 years, australia is still in the very small group of advanced countries to have increased its share of world output. using the imf ’ s annual database, it is possible to discern some interesting longer - term trends from developments over the past 20 years. this is a useful exercise because it is an antidote to the type of thinking which concentrates on very recent developments, some of which i will cover later. c. gust and j. marquez, “ productivity developments abroad ”, federal reserve bulletin, october 2000. “ the new economy beyond the hype ”, oecd, paris, 2001. imf, world economic outlook, database, http : / / www. imf. org / external / pubs / ft / weo / 2002 / 01 / data / index. htm. the two main trends

gave the committee and then present a new set for the period ahead. i will continue that tradition, but we should bear in mind there is a full year of new data available to us so there is more to review. last may, when we had only two of the four quarters of 2000 / 01 available to us, i said we expected year - on - year gdp growth in that year to be about 2 per cent ; in the event, it came in at 1. 9 per cent. my forecast for year - on - year gdp growth in 2001 / 02 was 3 to 3½ per cent, and our current forecast ( still with two quarters yet to come ) is 3. 6 per cent. so, even though there have been big swings in the international outlook in the meantime, the last 18 months seem to have turned out much as we expected ( unlike the previous six months where the extent of the housing - induced setback took us largely by surprise ). on the prices front, we still had not seen the gst bulge pass through the system when we met last may. the forecast i presented at the time was that when it had passed through, the rate of inflation measured by the cpi would settle at 2½ per cent. in fact, that was “ spot on ” for the four quarters to the september quarter of 2001, but by the december quarter inflation had risen to 3. 1 per cent, and by the march quarter 2002 it was 2. 9 per cent. so, on average, we slightly underestimated the rise in inflation. for the year ahead, i. e. 2002 / 03, we are forecasting the economy to continue growing at 3½ to 4 per cent as it completes the eleventh year of its expansion and enters the twelfth. the outlook for inflation over the same period could best be summarised as remaining near the top of our target range, although we expect it to go down slightly for a time, and then to come back up. this was the view expressed in our quarterly statement on monetary policy released earlier this month. in short, the outlook for economic growth and inflation is such that the economy no longer needs the boost provided by an expansionary stance of monetary policy. we took the first step towards returning monetary policy to a more neutral setting earlier this month, and, unless unforeseen developments intrude, we should continue the process as we go ahead, while all the time carefully examining incoming data, both from here and abroad