Economics and International Trade: GDP, Agriculture, and Solar Power Market of Australia

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ECONOMICS AND INTERNATIONAL TRADE

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Table of contents
1.0 Introduction..........................................................................................................................3
2.0 GDP and economic growth of Australia in the last five years.............................................3
3.0 Reforms in the agricultural sector of the economy and its contribution..............................4
4.0 Demand and supply of solar power market of Australia......................................................5
5.0 Conclusion............................................................................................................................7
Reference....................................................................................................................................8

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1.0 Introduction
Economic performance is one of the important indicators of the overall wellbeing. However,
there are many of the drivers that make sure that economy is growing from time to time. Few
of the important sectors of the economy that contributes to the GDP of a country include
service, manufacturing, agriculture and many more. In case of Australia which is one of the
consistently developed economies of the world also is driven by the performance of these
sectors. One of the unique achievements of the Australian economy is the continuous steady
GDP growth rate over the years. The objective of this paper is to look into the structure of the
economy and find out how the performances of the respective sectors have contributed
towards the economic growth of the country. In addition to that, the paper also furnishes and
analyses the policies of the government which also has provided the platform for the
economy to grow during the last five years.
2.0 GDP and economic growth of Australia in the last five years
The performance of the economy of Australia in the last five years has been very different
from other five-year performance of the economy. One of the major changes that have been
seen in the economy of the country in this five year is that there have been changes in the
structural composition of the economy (Benn and Perey, 2015). Australian economy in the
year 2012 has been mainly driven by the service sector. As per the data of the year 2017, the
service sector is still the largest sector of the economy that employs most labours of the
labour force of the country. The size of the service sector is around 69.2% which employs
almost 72% of the overall labour force of the country. However, Chubb and Watermeyer
(2017) pointed out that the manufacturing sector of the economy is increasing in size since
the year 2010. Another component of the GDP of the country is the agriculture which exports
most of the products to the eastern Asian trade partners of the country. The eastern Asian
trade partners such as Singapore, Thailand have performed exceptionally in the last few years
in terms of economy and these have repercussions in the economy of Australia as well. The
last five years have seen an immense growth in the personal wealth of the citizen of the
country as well. According to the per capita wealth of the country, it has become the second
largest after Switzerland. The overall wealth of the country stands at $7.39 trillion USD as
per the figure of the year 2017. The estimation suggests that the wealth growth of the
economy will continue in the future that can further stabilise the economic growth of the
economy.

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One of the important events in the history of the economic performance of the country is the
mining boom that it experienced in the year 2004. The effect of the boom is still being used
by the government as a force to grow the economy. The government of the country removed
the foreign investment cap in the year 2010 in the manufacturing sector. Coupled up with the
expansion of the mining sector this removal of cap brought more investment in the
manufacturing sector of the economy leading to an unprecedented expansion of the economy
as a whole (Findlay and Garnaut, 2017). However, since the year 2012, the government of the
country has started to reduce the interest rates of the country in order to increase liquidity in
the market of the country. The interest rates have fallen from 3.5% in the year 2012 to 1% in
the year 2017. Despite the decrease in the interest rate, the expansion of the manufacturing
sector has not dropped. In the year, the manufacturing sector of the country contributed 6% to
the GDP of the country. Compared to that, the contributions have increased in the year 2017
which is not around 16% of the overall GDP of the country.
Again, the economy has also changed in terms of the job opportunity that is provided to the
people of the country. The expansion of the manufacturing sector, accompanied by a huge
amount of tax cut for the commercial organisation resulted in a huge number of job creation
in the economy. In addition to that, the average wage rate of the labours has also been good
during the last five years which have in turn influenced the aggregate demand for the goods
and the services of the market. According to Christensen (2016), the service sector of the
economy is becoming saturated and hence the structural unemployment in the economy was
increasing steadily. A nontechnical form of job offers from the manufacturing side absorbed
most of the structural unemployment of the economy and hence the overall production of the
economy rose during the last five years. According to the data of the economy, the
manufacturing sector of the economy employed 13% of the labours of the labour force of the
country. This increased due to the performance of the manufacturing sector to 19% in the
year 2017 (Murray, 2017).
Again, although the recent interest rate level of the economy is dropping, the higher interest
rate before that had increased the savings rate of the economy of the country that is resulting
in high level if the home investment (Schneider, 2018). Investment in machinery and
equipment in the manufacturing sector has therefore increased the productivity of the unit
labour. This has added to the performance of the manufacturing sector of the economy in the
last five years. Therefore, manufacturing boost of the economy has been the key for the