AUSTRALIAN ECONOMY

Australian Economy

Australian Economy

Executive summary

For last two decades, Australia has been enjoying a robust growth with an annual real GDP growth of 3.3%. 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. Australian economy is dependent on the services and resources industries. The current account deficit has also been increasing due to the major issues faced by the country. Australian economy operates under the floating exchange rate. The reserve bank of Australia did not change the policy interest rates (overnight cash rate), and it remained at 4.75% in April, 2011. The unemployment rate rose in October, to 5.4%, from 5.2% in September. Extended and Robust period of economic growth has stretched country's infrastructure resources to the limit ('Economic, 2010,, 6).

Introduction

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. 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 ('Economic 2010, 6) ('Economic, 2010,, 6).

Australian economy

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 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 economy operates under the floating exchange rate. Consumer confidence indicators have been shaken by the RBA's decision to push up interest rates: the Westpac-Melboume Institute's Index of Consumer Sentiment fell by 5.1% month on the month in November. Furthermore, the fact that Australia's four big commercial banks increased their lending rates by up to 20 basis points more than the RBA had raised the OCR has added to the pressure on consumer confidence. Reserve bank of Australia makes independent decisions about the interest rate despite the political procedure going in the country. The bank avoided raising the benchmark of interest rate as expected. The bank hiked the interest rate in November 2010 but will not be able to hike it again due to inflation and moderate economic growth (Stevens 2008, 15) ...