A downturn in Australia’s mining output and worries of Chinese growth has driven the OECD’s Australian growth forecast down to 2.6 per cent.

In its latest outlook released in Paris earlier this week, the OECD says that more interest rate cuts may be needed in the even of a slowdown in the Chinese economy.

The latest downgrade comes after the OECD placed the forecasted growth rate of the economy at 3.0 per cent, which was a further downgrade from 3.7 per cent.

In its statement, the OECD said that the peak in mining investment will see the resources industry gradually lose its stimulatory effect on activity.

But, according to the organisiation, it’s not all doom and gloom, with growth projected to climb back to 3.2 per cent trend growth in 2014.

The report also found that non-mining sectors are likely to make a return to form after lower interest rates trickle down.

The OECD also came out in support of the Federal Government’s controlled return to budget surplus, commending the Federal Government’s position on maintaining deficit until 2015/16.

The report concluded that global projected growth is set to top at 3.1 per cent, and will remain shaky for sometime.

Treasurer Wayne Swan says the report endorses the Government’s fiscal strategy, and shows that the country is set to outpace the majority of the global economy.

“The OECD expects the Australian economy to outperform every single major advanced economy – and the OECD as a whole – over the next two years. In 2013 alone, Australia's growth is expected to be double the average for OECD economies,” Mr Swan said.

“The OECD area as a whole is expected to record a sluggish growth of 1.2 per cent in 2013 before improving to 2.3 per cent in 2014, with emerging economies continuing to drive the vast majority of global growth.”