Australia Economy

Australia Economy  | read this item

Australia’s economy has undergone positive reforms in the recent years that have led to the developing of its economy and raising of the standard of living in the country. As projected, the economy of the country is to go on its growing for the five years or more.

With its nominal GDP that amounted to $889 billion in 2007, Australia’s economy comes 14th in the world. After the recession in the 1980s, the economy of the country had been on the rise for 16 years. That period was characterized by the increasing demand for commodities and health government policies. The average GDP growth rate has reached 4.4%. In the period from 2003 to 2007, this figure was 3.3%. However, in the following five years this number is projected to lower to the 2%-3%.

Australia represents a western-style market economy. The biggest sector of its economy is the services sector that provides about 72% of GDP, as of 2007. Now the country enjoys the growing demand for commodities. Australia is one of the world’s biggest exporter of natural gas, coal, iron, bauxite, copper, tin, gold, silver, uranium, tungsten, mineral sands, lead, zinc, opals, diamonds, grain, wool, meat and food products. But at the same time, the agriculture and mining together provide only 4.7% of GDP. But despite this fact, these sectors make up 65% of exports.

The CIA World Factbook states that Australia’s import amounted to AU $228 billion of goods and services in the year 2007, while its export made up AU $216 billion. Australia’s major exporters are such countries as Japan, China, South Korea, US and India, and the main importers are US, China, Japan, Singapore, and Germany.

As far as inflation is concerned, it is on the rise, just like in any other country in the world. By the end of the previous year, its rate amounted to 4.2% and is expected to keep on growing going over the 2%-3% mark set by the Bank of Australia. The trade balance in Australia is good, but account deficit makes up 5.8% and is expected to rise till 2012, as reported by the International Monetary Fund.

Despite the fact of being traditionally in close cooperation with Europe and US, today the country depends on Asia to a large extent. First, it is her main partners, Japan that sees to Australia’s capital financing and China, being the country’s major exporter.

The economy has also benefited from a housing market boom and a strong national currency.

However, the manufacturing sector has been rather unstable lately. But it managed to recover in the year 2007. The sector made up approximately 10% of the country’s GDP that year.

The reforms that have been implemented by the government turned out to be very beneficial for the economy of the country. In the past, Australia was under tight rules charters. But then there have appeared favorable conditions for the economic developing that were brought about by reducing high tariffs, opening the financial services sector, making the labor markets more flexible, reforming the tax system and privatizing government companies.

Topics: Australia Economy, economy, gdp growth, gdp growth rate, Recession