Australian Economic Analysis

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Australian Economic Analysis

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Australian Economic Analysis
Introduction
The commonwealth of Australia is consisting of the Australian mainland continent and
different islands. It is considered the 6th largest country that keeps a mixed economy. The country
is among highly urbanized countries and well known due to large cities attractions just like
Brisbane, Perth, Melbourne, and Sydney. The country also gives private freedom and regulations
of government along with centralized planning is also a source of attraction for foreign
investment. Australia also has the membership of Trans-Pacific Partnership as well as Asian
Pacific Economic Cooperation. The most dominant sector of the Australian economy is the
service sector that contributes approximately 62.7% in GDP. The services sector employed
almost 78.8% of the entire labor force. The country is also rich in having natural resources that
also give a positive edge to the Australian economy. The country is considered the 10th largest
country in terms of natural resources (Reuters.com, 2021).
GDP, Inflation, and Unemployment
The major indicators of any economy are GDP, inflation, and unemployment. The
performance of these indicators can tell the performance of the economy and tell whether the
economy is growing or contracting. The five-year performance of these indicators of Australia is
as bellow:
Note: All the data is in percentage.
Year GDP Growth Inflation Unemployment
2016 2.8 1.3 5.7
2017 2.3 1.94 5.6

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2018 2.9 1.91 5.3
2019 2.1 1.6 5.2
2020 -0.3 0.8 6.6
URL: https://data.worldbank.org/indicator/NY.GDP.MKTP.KD.ZG?locations=AU
URL: https://data.worldbank.org/indicator/FP.CPI.TOTL.ZG?locations=AU
URL: https://data.worldbank.org/indicator/SL.UEM.TOTL.ZS?locations=AU
GDP is one of the most important variables that explain how the economy is performing
and trends of it tell the health and based on them, the future course of the economy can also be
determined. The above table represents the GDP of the Australian economy. The five years data
of GDP show that the Australian economy has to face fluctuations. However, the given data
indicates that these fluctuations are not major due to which GDP growth remains stable. The
stability in the GDP growth is in the first four years of the selected period that is from 2016-2019
in which the growth range was from 2.1% to 2.9%. In 2020, the GDP growth rate fell from
2.16% 2019 to reach the level of -0.28% in 2020. The reason behind it is the Covid-19 pandemic
that affects the economy badly.
Like any country, Australia also imposes a lockdown to reduce the spread of the
pandemic. It has to close businesses to operate and people were restricted to stay at their home
and avoid unnecessary movements. However, during this period, the economy showed good
control over prices and took measures to avoid unnecessary inflation and make products prices
low for people. Despite all measures, this shock impacted the economy negatively. So, the GDP
growth is very important as the income level and life standard of people depends on it. The
growth in GDP also can reduce the fiscal deficit and make the infrastructure of the economy
attractive (Data.worldbank.org, 2021).