Australia or the “Land Down Under” is the world’s biggest island and is one of the major economies. It is a highly services-oriented economy, with 70% of its GDP coming from industries such as finance, education and tourism.
It is also heavily dependent on its raw material exports, which explains why its economic growth is affected by commodity prices. The country is rich in terms of natural resources, making it a major exporter of agricultural products such as minerals, wheat, wool, and coal.
Australia boasts of having a strong per-capita GDP, outpacing even Germany, the United Kingdom, and France. Even with its large land mass, the Australian population is only at 23.1 million with 2.90 people per square meter and a median age of 38.1 years old. Australia also has a high literacy rate, ranking 36th among 215 nations surveyed with an education index of 0.981.
The Australian economy is widely known for narrowly dodging a technical recession back in 2009 when the rest of the global economy suffered consecutive quarters of negative GDP growth. It was able to chalk up a GDP of $1.525 trillion in 2014 and was ranked the 12th largest economy in the world as of 2012.
Key Economic Indicators
Australia’s economy has been expanding at an average pace of 2.5% for the past few years, well within the global growth norm. Consumer price levels have been fluctuating at around 1.5% to 2.0% annually while its jobless rate currently stands at 5.7%.
Private consumption and retail sales have been steadily making positive contributions to overall economic performance, with the former up by 2.6% in 2015 and the latter up by 2.7%. Industrial production has slowed, as the country has been shifting away from its dependence on the mining sector and onto non-mining activity.
Retail sales for December 2015, however, showed a flat reading instead of the projected 0.5% gain, indicating that consumers would rather save than spend, possibly due to weaker financial confidence and a shaky jobs market.
Trade Activity
Exports have been rising by around 6% each year, although a slowdown is expected for the coming years due to weaker demand from its main trading partner, China. In addition, the tumble in commodity prices, particularly of iron ore, is expected to weigh on its trade revenues.
