The Australian economy is among the most developed, modern market economies in the world. Currently, the GDP of Australia is approximated to be US$1.6 trillion while the country’s total wealth is about 6.4 trillion dollars. As of 2011, it was ranked the 13th largest national economy in terms of nominal GDP. The economy is dominated by the service sector, which represents 68% of the GDP. The mining sector, on which the economic growth of the country is largely dependent, accounts for 19% of GDP.
Fundamental analysis
Australia’s economic fundamentals are currently strong, with solid economic growth, contained inflation, low unemployment, strong public finances along with a record pipeline of business investment. The country’s economy projected to grow more strongly that all other major advanced economies in the coming couple of years. The OECD predicts a growth rate of 3.1 percent in 2012 and 3.7 percent in 2013. Following the effects of the European sovereign debt crisis, growth across OECD economies is expected to remain constant at 1.6 percent in 2012 with the probability of picking up to a growth rate of 2.2 percent in 2013. However, emerging economies in this region are expected to experience continuous growth. Australia’s unemployment rate is expected to remain substantially lower than 7.9 percent for the entire OECD economy in 2013, and about half of the 11.1 percent projection for the entire euro area in the same year.
The country has adopted a well-placed 2012-2013 Budget to ensure that its economy continues to remain amongst the strongest economies in the developed world. This is meant to be achieved through delivery of four years of surpluses as a buffer in the uncertain global financial times and enable the Reserve Bank to reduce interest rates even further as need may be. In addition, the Budget would help diversify the benefits of the economic boom by delivering the much needed financial relief for non-mining businesses and millions of middle and low income households.
Top down analysis
