Comparative Analysis of Australian Economy 2015-2019

Running head: ECONOMICS
Economics
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Executive Summary
Objective of the report is to make a comparative analysis of performance trend of Australian
economy between 2015 and 2019. This has done by making a trend analysis of some important
economic variables since 2015. The different economic variables measure economic
performance in different areas. The first aspect to be considered is the movement of aggregate
output. This is measured by the trend movement of Gross Domestic Product of the country. Rate
of change in GDP is an indicative measure of economic growth. Evaluation of GDP growth trend
in Australia suggested that growth has slowed down in recent year relative to that in 2015. In
2015 economic growth was strengthened gaining support from housing boom and higher
consumer spending. These factors however are longer in force due to changing economic
condition leading to a slower growth. An import aspect indicating overall state of the economy is
the performance of labor market. This is measured by trend in unemployment rate. Currently
unemployment rate is at a low level compared to that in 2015. Low unemployment is mainly due
to the increase in part time employment which offset the loss in full time employment.
Movement of price level is another important measure to be considered when assessing
economic health of a country. Measure tracing movement of price level is termed as inflation
rate. Reserve Bank of Australia develops monetary policy measure to control the movement of
price level. RBA targets to keep the inflation rate within the limit ranging between 2 to 3 percent.
The inflation rate since 2015 though remain within the targeted range inflation rate is
comparatively lower in 2019 than accounted inflation in 2015. Factors adding some inflationary
pressure currently include food and transport prices. Price have lowered significantly for
financial service, education, health and household equipment. Australia being a highly open
economy, performance of trade greatly influences state of the economy. Aspects related to trade

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include movement of terms of trade, state of current account balance, movement of exchange
rate and external debt of the nation. Terms of trade of Australia has improved since 2015.
Balance of trade for Australia though remains at a deficit but with an increase in net export there
is a notable improvement in current account balance. Because of weak domestic and global
economic condition Australian dollar has depreciated in recent years which further support
export growth. Finally, examination of net foreign liabilities shows that debt in the external
sector has increased sharply.
Besides discussing current economic state of Australia, the paper investigates hurdles that
economies of Australia is currently undergoing. First, economic growth has declined to below
average level. With this the nation reached to the slowest ever growth rate. Second, sudden
cooling down of property market is currently creating tensions in the economy. House price has
declined sharply in capital cities like Melbourne and Sydney putting the economy at risk. Third,
both nominal and real wage in the country are recording a notably slow growth.

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Table of Contents
Introduction......................................................................................................................................4
Economic performance of Australia................................................................................................4
Three major issues concerning Australian economy.......................................................................9
Conclusion.....................................................................................................................................10
References list................................................................................................................................11