With 21 years of uninterrupted growth Australia stands out among OECD countries. This performance has been sustained by sound policies and, more recently, booming demand for commodities from Asia. However, temporary factors, including the 2008-09 economic and financial crisis and increased caution among households from uncertainties in the international environment, have slowed growth. At the same time, Australia is adapting to structural changes prompted by the commodity boom, a strong exchange rate and terms of trade, which, while having moderated recently, remain high by historical standards. The main challenge for policy is therefore to manage a sustained recovery, while promoting important structural changes in the economy.