The Australian economy has avoided recession © James D Morgan/Getty Images
The Australian economy has avoided recession © James D Morgan/Getty Images

In the spotlight: Australia

posted by Marc Gadian
14 July 2017

Population

24.6m

Area

7.692m km²

The helicopter view

Despite a weak labour market/wage growth, analysts expect broadly stable growth. GDP is set to expand 2.5% this year, with 2.8% growth in 2018. Inflation is expected to average at 2.1% this year.

Economic outlook

The services sector is the largest part of the Australian economy, according to the CIA World Factbook. Australia was the only advanced economy not to experience a recession in 2008–2009.

Biggest foreign investor

Chinese acquisition of Australian real estate totalled $AU31.9bn, says a report by the Foreign Investment Review Board. The biggest foreign landowner is the UK.

Supply chain issues

Australia is an open market with a high-income economy, and is a member of trade forums including the G20, OECD, WTO and APEC. It has a free trade agreement with China and other countries such as the US. Challenges in China, such as changing regulation or food safety issues, can have a knock-on effect on supply chains.

Strengths

Australia is rich in flora, fauna and natural resources. World Bank data for 2017 lists it as the world’s 12th largest economy.

Challenges

OECD data shows 5.7% of the labour force as out of work, with the rate among 15-24-year-olds at 13.5%. Demand from Asia for resources and energy has stalled.

Bottom line

Australia has just had 103 quarters without recession, equalling the Netherlands’ record. China’s demands for its resources (iron ore and coal) may determine how long this continues. Toyota and Ford’s decisions to close their plants is a death knell for the car industry, however.

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