This year’s New Year’s Eve party might not have the 9.30pm early fireworks display on Sydney Harbour but the celebrations we’re bound to have will be a forerunner to a year we won’t easily forget.

You might be all lockdown-out right now but one of the world’s most respected think tank bodies effectively has told Australians that 2022 will be party time for the economy!

The Organisation for Economic Cooperation and Development (OECD) has told us something we already know — 2021 gave us a lot less to celebrate, as the Delta variant infected too many of us in Victoria and New South Wales. This then undermined the health of our economy. The OECD says it has cut back its May forecast of a whopping 5.1% growth rate down to 4%. The Australian’s Tom Duse Vic says this was “…the biggest decline among the world’s 20 largest economies.”

Interestingly, South Korea (which, like us, was really good at smashing Coronavirus 101) has also had a Delta and economic-related problem because early success in beating the virus has led to lower vaccination levels.

It’s this expectation around vaccination rates here that has seen the OECD give us a big thumbs up for 2022.

So what is the economic crystal ball revealing about 2022? Try these for things:

1. A big economic rebound next year.
2. Unemployment will fall.
3. The CBA says there’s $230 billion worth of savings that will bankroll the economic party of 2022.
4. The global economy not only grows at 5.7% this year but another strong 4.5% next year, which is good news for an economy like Australia, which is a big exporting nation.

“The OECD said speedy vaccination and flexible government spending were the keys to a sustained global recovery from the pandemic,” The Australian reported today.

Personally, I think the OECD’s guesswork on how our economy will rebound is a little more conservative than it needs to be. Recently, I’ve been staggered by how positive we have remained, despite the impact of the lockdowns.

Every Saturday in The Switzer Report (our investment subscription newsletter) I include a survey of the key economic data for the week, using this data as an indicator for what might lie ahead for investors and stock prices.

Despite NSW and Victoria being in lockdowns, this is what I liked from last week:

1. The monthly Westpac-Melbourne Institute Index of Consumer Sentiment rose by 2% to 106.2 in September. How did that happen?
2. The weekly ANZ-Roy Morgan consumer confidence rating rose by 3.1% (the most in 22 weeks) to an 8-week high of 103.1 (long-run average 112.5 since 1990). Sentiment surged 10.6% in Sydney and lifted by 6.2% in Victoria, but was down 3.2% in Queensland. (I like it but I can’t easily explain it!)
3. The national unemployment rate fell from 4.65 to a 12½-year low of 4.5% in August. The fall is psychologically good (though surprising) and is explained by the fall in the participation rate, but I like it because it has suppressed bad media headlines.
4. CBA group economists estimate that Aussies have accrued $155 billion in excess savings over and above what they’d normally save during the pandemic. By the end of 2021, this is likely to exceed $200 billion (or 10%) of gross domestic product (GDP). Once lockdowns end in NSW, Victoria and the ACT, consumer spending could lift sharply as confidence improves when government restrictions are eased. And consumers will have money to spend!
5. Combes estimates that over $41 billion in dividends will be paid in coming weeks.  Government welfare payments, plus savings by Aussies who haven’t been able to spend on overseas holidays, Friday and Saturday night restaurant outlays and even just browsing and shopping on the weekends, will spring into delayed action in 2022 ‘big time’ and drive our economy, sales, company profits, stock prices and super fund returns higher.

I think the OECD is underestimating the desire and capability of Australians to be confident and to party like it’s 2022!

Only silly disruptive policies out of Beijing could spoil the good times expected next year, so I’m hoping that some smart politics prevails between the US and China, if only for economic reasons!