The OECD believes the next move in Reserve Bank interest rates will be up, sometime before the end of 2017.

In its review of the Australian economy prepared as part of its Global Economic Outlook, it says the hike will be "appropriate, given likely monetary-policy developments elsewhere, the cyclical development of the domestic economy and the need to unwind tensions from the low-interest environment, notably in the housing market".

The Paris-based organisation consults closely with the Australian Treasury and the Reserve Bank in the preparation of its reports and the Treasury has a permanent representative stationed at its headquarters to provide input to its reports.

It says the Australian government should be prepared to go slow on its plans to wind back the budget deficit and spend more in order to support the economy.