Australian Economic Growth Analysis: 2005-2018

AUSTRALIAN ECONOMIC GROWTH ANALYSIS: 2005-2018 1
Australian Economic Growth Analysis: 2005-2018
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AUSTRALIAN ECONOMIC GROWTH ANALYSIS: 2005-2018 2
Introduction
The Australian economy is among the best performing economies in the region of Asia-Pacific
and the world at large. It is ranked among the richest nations in the region of Asia-Pacific
(Plumb, Kent and Bishop 2013, p.40). The Australian economy has undergone economic
expansion for a period of approximately more than two decades. The nation’s economic
prosperity has resulted from its adoption of sound macro and microeconomic policies which
highly encourage investment in the nation both domestically and internationally. The main
reason behind its better economic growth is the adoption of free economy policy whereby almost
all its economic sectors are open to foreign competition and readily available highly skilled
labor. The government of Australia has highly reformed its education sector in order to improve
the quality of labor in the nation. Every Australian citizen is at least required to have twelve
years of education. According to the 2018 Index, Australia is ranked position 5 in terms of
economic freedom with a score of 80.9. This is a quite better performance in terms of economic
freedom and has been contributed by the Australian high scores in labor and trade freedom, fiscal
health and government integrity. In terms of economic performance in the Asia-Pacific region,
Australia is ranked position 4 out of the 43 nations in the region.
The Australian economy is anticipated to do better in the future as structural changes are being
done especially due to the nation’s mining sector expansion. The Australian government is doing
its best to improve and maintain its better economic performance by undertaking various reforms
some of which include reduction of corporate taxes, the increment of more free trade agreements
and huge investment in the education sector for production of the highly skilled labor force
(Hatfield-Dodds et.al 2015, p.49). My report analyses the Australian economic growth from the
year 2005 to 2018 by evaluating the real gross domestic product and the gross domestic product

AUSTRALIAN ECONOMIC GROWTH ANALYSIS: 2005-2018 3
growth rates for the period. In a nutshell, the Australian economy has been performing well and
better results are anticipated in the future.
Real Gross Domestic Product Growth for Australia from 2005 to 2017
Real gross domestic product refers to the value of the final output produced in a given nation
over a given period of time considering the prevailing inflation levels over that given year. It is
also referred to as the inflation-adjusted gross domestic product. It is preferred in comparing the
economic growth of a given nation and other nations since it gives a more accurate figure as
compared to the nominal gross domestic product. The nominal gross domestic product involves
the measurement of a nation’s value of final goods and services over a given period of time
inclusive of inflation or rather the current prices. It, therefore, doesn’t give a true reflection of a
nation’s economic growth as it is not adjusted for inflation. The following table shows data on
the Australian percentage change in real gross domestic product from the year 2005 to 2017. The
data has been obtained from the International Monetary Fund dataset containing information on
the real gross domestic product for various nations expressed as the annual percentage change.
The table shows that the Australian real gross domestic product growth rate has been fluctuating
between the years 2005 to 2017. The growth rates have been kept positive meaning that although
there is a fluctuation in growth rates; the real gross domestic product has been improving each
preceding year. This means that the economy of Australia has been growing though at different
rates. The performance of the economy has been improving each preceding year though the
extents of improvements are different (McLean 2012, p.43). No any year posted a lesser amount
in terms of real gross domestic product than the previous year.

AUSTRALIAN ECONOMIC GROWTH ANALYSIS: 2005-2018 4
From the table, the Australian economy grew significantly during the year 2007 with the year
real gross domestic product growth rate of 4.3 percent. The economy underwent a sluggish
growth during the year 2009 posting the lowest growth rate of 1.9 percent. This was as a result of
the great global financial crisis which occurred during the year 2008 to 2009 (Morgan and
Astolfi 2015, p.7). Many nations during this period posted a negative economic growth but
Australia showed a great adjustment and was able to post positive economic growth. From the
year 2009, Australia recovered from the global financial crisis due to its adoption of sound
expansionary macroeconomic policies and has been able to keep its real gross domestic product
growth rate above 2.0 percent.
Australian Real Gross Domestic Product Growth Rates from 2005 to 2017
(Source: International Monetary Fund Data on Real GDP Growth (Annual Percentage Change))
A graph for the Australian real gross domestic product growth rate from the year 2005 to 2017
has been shown below:
Year Real GDP growth (Annual Percentage Change)
2005 2.2
2006 2.8
2007 4.3
2008 2.7
2009 1.9
2010 2.4
2011 2.7
2012 3.9
2013 2.2
2014 2.6
2015 2.5
2016 2.6
2017 2.2