Australian Economy Analysis

This presentation provides an analysis of the Australian economy, focusing on key indicators such as GDP, inflation rate, and unemployment rate. It also discusses the government's measures to reduce unemployment and offers recommendations for improving economic performance. The prese...Read More

AUSTRALIAN ECONOMY ANALYSIS 1
AUSTRALIAN ECONOMY
ANALYSIS
Student Name
Institutional Affiliation
Facilitator
Course
Date

AUSTRALIAN ECONOMY ANALYSIS 2
Australian Economy Analysis
Introduction
Australia is among the rich nations not only in the Asia-Pacific region but also in
the whole world.
Australia has been doing well in terms of economic performance which is
measured in terms of the gross domestic product.
Even during the 2008-2009 financial crises in the whole world, Australia was
among the few nations which posted positive economic growth though at a
reduced rate as compared to the past years (Daley 2018, p.3).
Australia has been able to maintain its good economic performance by adopting
sound micro and macroeconomic policies. Through these economic policies, the
government of Australia has been able to readily avail highly skilled labor force for
various businesses and it has also opened up almost all its sectors to foreign
competition.

AUSTRALIAN ECONOMY ANALYSIS 3
Australian GDP
Gross domestic product (GDP) generally refers to the value of the final goods and
services which is measured in terms of money, produced in a given nation over a
certain period of time which is considered to be one year in most nations.
Australian economic performance is measured by the rate at which its gross domestic
product grows over a certain period of time.
Currently, Australia has a GDP of $1.2 trillion which represents economic growth of 2.8
percent (Haig 2018, p.1).
The economic growth rate of Australia has been averaging 0.85 percent since the year
1959 up-to-date. The highest growth rate was recorded during the year 1976 when it
was 4.40 percent. The lowest growth rate was recorded during the year 1974 when it
was -2 percent.

AUSTRALIAN ECONOMY ANALYSIS 4
Australian inflation rate
Generally, the inflation rate measures the rate at which the price of goods and
services generally increases over a given period of time in a given nation.
From the year 1951 up-to-date, the Australian inflation rate averaged 5.0
percent (Brouwer and Ericsson 2018, p.433). The highest inflation rate was
recorded during the year 1951 fourth quarter at 23.90 percent. The lowest
inflation rate was recorded during the year 1962 at -1.30 percent.
For the past ten years, since Australia recovered from the great 2008 – 2009
great recession, inflation rates have been averaging 2.0 percent.
Current inflation rate stands at 1.8 percent.

AUSTRALIAN ECONOMY ANALYSIS 5
Australian unemployment rate
Unemployment generally refers to a situation whereby
people who are ready to participate in the labor market and
seriously searching jobs do not find them.
Unemployment has been a major issue of concern in
Australia (Bajada 2017, p.177).
From the year 1978 up-to-date, the unemployment rate in
Australia has averaged 6.27 percent. The highest rate of
unemployment was witnessed during the year 1992 at 11.22

AUSTRALIAN ECONOMY ANALYSIS 6
Types of unemployment in Australia
 The two common types of unemployment
in Australia are structural and frictional
ones.

AUSTRALIAN ECONOMY ANALYSIS 7
Australian government measures to reduce
unemployment
The Australian government has highly invested in education to
ensure high-quality education is offered to Australians.
The government has also encouraged at least 12 years of
education to reduce the number of unskilled personnel in Australia.
The government has also reformed the minimum wage in
Australia to ensure it is fair so as encourage employment in the
private sector.

AUSTRALIAN ECONOMY ANALYSIS 8
Australian interest rates
Interest rates indicate the costs associated with borrowing
capital in a given country over a given period of time.
Since the year 1990 up-to-date, interest rates in Australia
have averaged 4.48 percent. The highest rates were
recorded during the year 1990 at 17.50 percent (Hawtrey
2017, p.337). The lowest rates were recorded during the
year 2016 at 1.50 percent.

AUSTRALIAN ECONOMY ANALYSIS 9
Australian consumer price index
Consumer price index indicates the number of goods and
services (usually a basket of goods) that a given amount of
money can purchase over a different time period (usually a
year).
The consumer price index in Australia has been on the rise
since the year 1950 averaging 44.95. The highest levels have
been recorded currently at 114.10 while the lowest levels were
during the year 1950 at 4.20 (Burns, Sacks and Gold 2017,

AUSTRALIAN ECONOMY ANALYSIS 10
Recommendations
In order to improve and maintain economic performance, the Australian
government should:
 Work towards lowering inflation rate to 1.5 percent so as to attract more
foreign direct investments as future uncertainty in investment is reduced.
 Invest highly in education and make it mandatory for every Australian citizen
to at least attain 12 years of education.
 Collaborate with the private sector to offer high-quality training to students
during their attachment periods before entering the job market.

11
Conclusion
Australia has been doing well in terms of economic performance.
The Australian government has adopted sound micro and
macroeconomic policies towards improving and maintaining excellent
economic performance.
The Australian government through the Reserve Bank of Australia has
tried to maintain both the interest and inflation rates at lower rates of 1.5
percent. This has enabled the Australian citizens to lead relatively higher
standards of living as compared to other nations more so those in the
Asia-Pacific region.
The unemployment rate has been higher in Australia averaging 5.0
percent but the government is working hard by investing highly inAUSTRALIAN ECONOMY ANALYSIS

AUSTRALIAN ECONOMY ANALYSIS 12
References
Bajada, C., 2017. Unemployment and the underground economy in
Australia. Applied Economics, 37(2), pp.177-189.
Brouwer, G.D. and Ericsson, N.R., 2018. Modeling inflation in
Australia. Journal of
Business & Economic Statistics, 16(4), pp.433-449.
Burns, C., Sacks, G. and Gold, L., 2017. Longitudinal study of Consumer
Price
Index (CPI) trends in core and non‐core foods in Australia. Australian and
New
Zealand Journal of Public Health, 32(5), pp.450-453.
Daley, J., 2018. The intangible economy and Australia. Australian Journal
of
Management, 26(1_suppl), pp.3-19.
Haig, B., 2018. New estimates of Australian GDP, 1861–2018. Australian
Economic
History Review, 41(1), pp.1-34.
Hawtrey, K.M., 2017. The Fisher effect and Australian interest
rates. Applied
Financial Economics, 7(4), pp.337-346.
Stevens, G., 2003. Inflation targeting: A decade of Australian
experience. Reserve