Australia has the strongest economy in the developed world and it is expected to outperform all comers for at least the next two years, according to the International Monetary Fund.

The Treasurer, Wayne Swan, said this update is consistent with the reasons he has given for bringing the budget back to surplus, and criticised Tony Abbott for "talking down the economy".

Cash bonus ... International Monetary Fund officials in Washington announced today that Australia will have the top-performing economy in the developed world for the next two years. Credit:Bloomberg

The IMF - which issued its World Economic Outlook in Washington overnight - said it expected the Australian economy to expand by 3 per cent this year as fiscal tensions from Europe and the United States continue to ease.

The body stated that after a major setback last year with the Eurozone crisis, the global prospect of far more stable financial conditions was gradually improving.