Australian Economy 2008
The Australian economy was last in recession in 1991. It has experienced a long period of economic expansion, with growth forecast to be a healthy 3.7%. The long period of economic growth has enabled a fall in unemployment from 11% to 5%. Australia has benefitted from a stable period of economic growth and also has benefitted from the renewed performance of Japan, its main trading partner. Also the rise of China and India have provided new markets for its exports of raw materials. China, in particular has a great appetite for the minerals and metals that Australia exports. This has contributed to a stronger Aus dollar (despite a worryingly large Current account deficit)
Like other industrialised countries, the Australian economy has struggled to compete as effectively with its manufacturing sector. Growth in this sector has lagged behind other sectors and this is one contributing factor to the growing trade deficit.
Problems facing the Australian economy include:
- Capacity shortages - nearly 82% of firms are reporting output is getting close to full capacity.
- Labour Shortages. The fall in unemployment means many firms report difficulties getting qualified labour.This could lead to inflationary problems
- Boom and Bust in the Australian housing market
- Trade deficit. - at Nearly 6% the current account deficit could cause a potential devaluation in the future.
Fundamentals of Australian Economy
| Currency | Australian Dollar |
| Population | 20.0 million |
| Human Development Index | 95.5% |
| Adult Literacy | 99.0% |
| Capital | Canberra |
| Main Trading Partners | Japan, Hong Kong, China, US, European Union |
| Education Spending as % of GDP | 4.5% |
Economic Statistics for Australian Economy
| 2007 | 2008 | |
| GDP 2007 | $637bn | |
| Economic Growth | 3.7% | 3.7% |
| GDP per head | $32,030 | |
| Inflation | 1.9% | 2.9% |
| Exchange Rate per 1 $US | 1.079366 | 0.95 |
| Current Account Deficit as % of GDP | -5.7% | -5.3% |
| Budget Balance as % of GDP | 1.4% | 1.5% |
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