GDP and Economic Growth in Australia: A 5-Year Analysis

HI5003 ECONOMICS FOR BUSINESS
(GROUP ASSIGNMENT)
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Table of Contents
Introduction...........................................................................................................................................3
GDP and Economic Growth in Australia...............................................................................................3
Conclusion.............................................................................................................................................9
References...........................................................................................................................................10
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Introduction
The Australian economy is one of the highly developed and the largest economy of the mixed
market in the world having GDP of around AUD$ 1.69 trillion as in the year 2017. This
country is considered as the second wealthiest country in regards to the wealth. In the year
2016, Australia’s total wealth was AUD$8.9 trillion. The economy of Australia is being
dominated by the service sector and comprises 61.1% GDP and employs around 79.2% labor
force. East Asia is defined as the most famous destination for the export and accounts for
almost 64% of the exports (Herndon et. al., 2014). Australia is at the eighth position in
regards to an estimated value of the natural resources of the value of US$ 19.9 trillion. In this
group assignment, there will be a detailed analysis in regards to the topic of ‘GDP and
Economic Growth in Australia last 5 years’. As per this assignment, there will be a
discussion regarding economy and GDP of Australia and its development. Australia is one of
the well-known countries having a strong economy. Stock exchange of Australia is
considered as the 16th largest exchange in the world in regards with a domestic capitalization
of the market as well as the largest derivative market of the interest rate in Asia. Australia's
currency is Australian dollar which is being shared by various states of Pacific nation. The
nation is a part of World Trade Organisation and has made its entry in the agreements of free
trade. The study will make the explanation of all the factors that are associated with the
growth of GDP and economy in the nation. There are various reasons that make Australia one
of the leading countries in the world, all such factors will be mentioned generate in detail so
as to generate a valid outcome.
GDP and Economic Growth in Australia
The economy of Australia advanced 0.4% in the year 2017, less than consensus of the market
of around 0.6% of the expansion and after 0.7% upwardly revised growth in last quarter. This
kind of growth rate is the weakest after having a contraction in the year 2016 in September as
the contribution that is positive are derived from the expenditure of final consumption while
net trade and non-dwelling construction are having a downward effect (McCombie and
Thirlwall, 2016). From the fourth quarter of the year, there is the growth in the economy of
around 2.4 percent which is slower than upward revise of 2.9 percent in the previous quarter.
The growth rate of the GDP in Australia is of average 0.85 percent from the year 1959 to
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2017 by reaching at around 4.40 percent in the 1976's first quarter and record 2 percent low
in 1974's second quarter.
(Source: Trading Economics, 2018)
In the three months to December, there were the inclusions of the various positive
contributions by private investment in equipment and machinery, public investment, the
spending of government and by household consumption. Meanwhile, there was the reduction
in the growth of net trade, investments in dwelling and investment in non-dwelling
constructions. There is an increase in expenditure of final consumption by 1.1 percent
(Shahbaz and Lean, 2012). Increase in the household spending was also there by 1 % is
driven by an increase in health, cafes, and restaurant, culture, recreation, and hotel. By
offsetting the rise there was a decrease in fuels, gas, and electricity. Expenses of government
increases by 1.7 percent with the increase in local as well as state government by 0.7 percent
as well as national government by 3.1 percent.
There was a contraction in the gross fixed capital of around 1.2 percent as there was a
decrease in private investment by 2.2 percent because of the fewer dwellings and construction
of non-dwelling. In contrast with it, there is the growth in public investment by 2.9 percent
being driven by the local and general state government as there was the transfer of assets
from the private sectors (McLean, 2012). Also, growth was there in equipment and
machinery investment by 3.3 percent.
Total stock raises AUD 14 million by following a decrease of AUD 93 million in the starting
of the quarter. Equalization of the increase was considered a decrease in the inventories of
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