Australia Economy Facts

by ebizdir · Published January 30, 2023 · Updated February 22, 2023

Economical overview

Australia is a rich country with huge natural resources. Over the past close to three decades, the country has shown uninterrupted economic growth, which no other country has been able to compare with. The economy has been through both the financial crisis and falling commodity prices. Today, the government strives to reduce dependence on the mining industry and broaden the economy.

Agriculture completely dominated the economy until the Second World War, but then a rapid expansion of both the manufacturing and mining industries began. Agriculture was modernized, the service sector expanded and tourism’s importance to the economy increased. The Asian countries took over the role of the Western world as Australia’s most important trading partner. Nowadays, the service sector is by far the largest measured in percentage of gross domestic product (GDP).

Countryaah.com: Major imports by Australia, covering a full list of top products imported by the country and trade value for each product category.

The foundation of today’s good economy was laid by the Labor government that took office in 1983. High tariffs were lowered and other barriers to trade were abolished, the financial market liberalized and the Australian dollar allowed to flow freely. In 1990, a privatization program was launched, including telecommunications, aviation and banks. An important economic impetus since the late 1990s has been strong private consumption, which has enabled high GDP growth despite crises in the outside world.

Australia had a low inflation rate in the early 2000s, the lowest unemployment rate in many years and a surplus in the state budget. Good housekeeping with state resources combined with growing foreign trade revenue paved the way for Australia to face the 2008 international financial crisis with extensive stimulus measures equivalent to close to $ 57 billion. The money went to the housing and road construction, schools and direct support to mainly low- and middle-income earners.

The fact that the mining industry was booming as a result of increased demand and investment from China, which needed iron ore and coal for its growing economy, provided additional help to manage the crisis. But unemployment increased and the growth rate in the economy on the whole was lower than before.

Abbreviationfinder.org: Check this abbreviation website to find three letter ISO codes for all countries in the world, including AUS which represents the country of Australia. Check findjobdescriptions to learn more about Australia.

However, in natural resource-rich states such as Queensland and Western Australia, growth was good due to demand not least from China (some spoke of a two-speed economy with, on the one hand, a thriving mining industry, on the other a struggling manufacturing industry). In 2012, the value of mining exports tripled, while investment in the mining industry continued to increase.

As the economic growth rate in China slowed by a few years into the 2010s, Chinese imports of iron ore and other mining products from Australia decreased as global commodity prices fell. But even though growth was declining in Queensland and Western Australia, among other things, and investment in the mining industry was declining, Australia managed relatively well, due in part to continued high commodity exports.

In addition to the mining sector, the financial industry and the construction industry have also been important industries during the last decade.

Dependence on China remains strong: exports there, today including agricultural products, still account for a significant portion of total exports, and the income of the many Chinese students who graduate from Australian universities and from wealthy tourist Chinese plays an important role for the economy . In addition, Australia has also been one of the countries in the world that Chinese investors have been particularly interested in.

During the 2010 century, the government has sought to remove the dependence on the mining industry through investments in other industries. In order to stimulate growth in other sectors and help the economy to cope with the change, the central bank has maintained low interest rates. However, the low interest rates have pushed high housing prices and led Australian households to incur large debts.

During the past decade, the state budget has shown a deficit and the goal is that the budget will end up at the latest by the beginning of the 2020s. Government debt has been at a relatively low level compared to many other rich countries.

In recent years, the gaps between high- and low-income earners have also increased, especially the indigenous population is far behind the richest group in the country.

FACTS – FINANCE

GDP per person

US $ 57,305 (2018)

Total GDP

US $ 1,432,195 million (2018)

GDP growth

2.8 percent (2018)

Agriculture’s share of GDP

2.6 percent (2018)

Manufacturing industry’s share of GDP

5.8 percent (2018)

The service sector’s share of GDP

66.6 percent (2018)

Inflation

1.6 percent (2019)

Government debt’s share of GDP

41.4 percent (2018)

Currency

Australian dollar

2011

December

Planned attack is canceled

Three men are sentenced to 18 years in prison each for planning a suicide attack against an army base outside Sydney.

Economic growth surprises

Economic growth proves to have been unexpectedly strong thanks to a positive development in construction and mining. Instead of an estimated 2.1 percent, GDP grew by 2.5 percent during the year.

June

Mining companies negotiate with Aborigines

British-Australian mining company Rio Tinto signs an agreement with five Aboriginal groups in the Pilbar region of Western Australia, which gives the company the right to continue its iron ore mining on Aboriginal land for 40 years against Aboriginal profits and 14 percent of its employment.