Australia GDP Analysis - Desklib

The article discusses the current state of the Australian economy and its GDP growth rate. It also analyzes the impact of Personal Consumption Expenditure, Gross Domestic Private Investment, and Government Expenditure on the country's GDP. The article concludes that the Australian economy is likely to meet an inflationary gap over the next six months, and the cash rate is not expected to change due to the CPI inflation rate being below 3%.

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SUBJECT: Australia GDP Analysis
● SUMMARY
The Australian Economy is moving towards the production phase of the mining industry being a
transitional underway. The resources sector investment has probably moved upwards for which
the demand sources would be required to strengthen the Australian economy if it has to flourish
with the rate which is constant throughout the full employment. The real Gross Domestic
Product of Australia is equivalent to its potential GDP since the rate of unemployment is
definitely below 5%. The country’s GDP growth shall remain constant in spite of its decreasing
growth rate from 3.17% to 3.15%, though very minute. The Australian economy is considered as
a mixed-market economy because it is largely governed by its large service sector. ("Australian
economy | Business ``The Guardian", 2019)
● IMPACT OF PERSONAL CONSUMPTION EXPENDITURE
Income growth is very slow also influencing consumption growth. If compared from the
previous year, it is clearly figured out that:
❖ The annual income growth rate in the year 2018 was 2.2% much lower than that existing
in the earlier 5 years to December 2013.
❖ There is minimal effect on the wealth of the economy, and they are almost equally larger
when compared to the last years
❖ Consumption is gaining significance as with the changes in the housing wealth as 1 %
increase would result in an increase of 0.16% and similarly, 1% increase in the stock
market would also increase the consumption by 0.12%.

❖ Consumption growth is expected to decrease to maybe 2% with a reduction in household
income growth. ("Economic Outlook | Statement on Monetary Policy – May 2019",
2019)
● IMPACT OF GROSS DOMESTIC PRIVATE INVESTMENT
The Australian economy has evidenced a gradual decrease since the last year wherein the
business file, NAB has certainly reduced to 0 from the range of 2 in March 2019. Evaluating the
economy of the country in the current year, the first 4 months of the year have reported that there
is a decrease in the expenditure in the business because the entire development is gradually
decreasing.
● IMPACT OF GOVERNMENT EXPENDITURE
The Australian Government has of late laid down the tax policies for the year 2019-2020,
wherein citizens are expecting to pay less tax for the per dollar of income. The consumer’s
disposal earning is further looking forward to increasing with the same movement in the
GDP of the country. This upward drift in the earnings are likely to change the investment and
expense strategy of the consumers, they are expected to increase their spending capacity.
("'Higher risk of recession in 2020' after GDP posts worst result since 2009", 2019)
● CONCLUSION
Australia has fairly secured its position in the market with an increase in the till date revenue
from the year 2018-19. The studies clearly show that there has been a large number of exports in
the country than the imports resulting in the generation of fair income. Due to this drastic
change, the GDP of the country is assumed to increase significantly. The unemployment rate in
the country is below 5%. The economy of the country is likely to meet an inflationary gap over
the span of the next 6 months. Though the cash rate is not expected to change due to the CPI
inflation rate being below 3%.

References
Australian economy | Business | The Guardian. (2019). Retrieved 20 September 2019, from
https://www.theguardian.com/business/australia-economy
'Higher risk of recession in 2020' after GDP posts worst result since 2009. (2019). Retrieved 20
September 2019, from https://www.abc.net.au/news/2019-06-05/australian-economy-slows-to-
levels-last-seen-in-gfc/11180688
Economic Outlook | Statement on Monetary Policy – May 2019. (2019). Retrieved 20 September
2019, from https://www.rba.gov.au/publications/smp/2019/may/economic-outlook.html
NEWS, B., & News, I. (2019). Australian economic growth hits 10-year low - Times of India.
Retrieved 20 September 2019, from https://timesofindia.indiatimes.com/business/international-
business/australian-economic-growth-hits-10-year-low/articleshow/70969003.cms