AUSTRALIAN ECONOMY

Australian Economy

Australian Economy

Introduction

Australian Economy is one of the fastest growing economies of the world. It is ranked 13th in the world in terms of Nominal GDP. In 2010, Australian GDP increased by 3.94% to $882.344. For last two decades, Australia has been enjoying a robust growth with an annual real GDP growth of 3.3%. Australian economy is dependent on the services and resources industries. Australian Economy is divided into two parts west/east economy. The services sector is dominated by the Eastern part of Australia, while Western Australia controls the natural resources of the country. Australia in past decades has been significantly dependent on trade with western countries, but with time and reforms introduced by the country, it is now not heavily dependent upon on trade with western countries. The following table illustrate the GDP outlook for Australia for the period 2004 to 2013.

Source: Property Investing. Org

Australian has an excess of natural resources, which it exports to different countries of the world. Its most significant trading partner is China as Australia exports various minerals to China in bulk amount. It also trades significantly with America and other European countries. Economic slowdown and high debt burden of European countries offer booming threat to Australian economy. Australian economy has also been hurt with the floods in the country as the GDP has declined in the last two quarters, and it has fallen by 1.1%. The current account deficit has also been increasing due to the major issues faced by the country.

Australian Economic Policy and its Economic Performance

Australian Economy has been performing well, but it made an effect in the last two years, because of global financial crisis and floods in the country. The value of Australian dollar increased in comparison with US dollars in April, 2011. Japanese disaster and increase in interest rates in China, led to a speculation that the demand for commodities could ease, putting global prices for commodity exports under downward pressure. When these fears faded, Australian dollar strengthened again. Tightening the labor market may push up the inflation.

Appreciation in the Australian dollar reflects that commodity prices remained high, and it will continue to increase. Although, strengthening dollar is good for the economy in one hand, but it is also affecting other sectors of the economy as trade is affected and these sectors have become less competitive and attractive for foreigners. It is making the tourism less attractive, and it is also making difficult for the education sector to compete with other countries. Numbers for undergraduate students have declined, and applications for the undergraduate courses declined by 11% in the first half of 2010/11. The federal government took a significant step of relaxing visa program for students.

According to the Australian Bureau of Statistics, unemployment in Australia declined in March 2011, as 32,100 full-time and 5700 part-time jobs were created. The unemployment rate declined to 4.9%, showing good performance and effectiveness of economic policies. It raised concerns over employment shortage in other ...