GDP Economics Assignment (pdf)
Added on 2021-05-31
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1ECONOMICS ASSIGNMENTGDP AND THE ECONOMIC GROWTH OF AUSTRALIA INTHE LAST 5 YEARS
2Table of contents1.0 Introduction..........................................................................................................................32.0 The GDP and the economic growth of Australia in the last five years................................32.1 The service sector of the economy and its contribution to the growth................................32.2 The manufacturing sector of the economy...........................................................................52.3 The agricultural sector..........................................................................................................62.4 Recent reforms in the overall policies of the government...................................................73.0 Conclusion............................................................................................................................8Reference..................................................................................................................................10
31.0 IntroductionGross Domestic Product (GDP) is the most important economic indicator when it comes tothe case of performance of an economy. The GDP of an economy is the final value of all thegoods and services which are produced within the boundary of the economy for a specifiedperiod of time. The GDP is also used for comparison between the performances of twoeconomies as well. One of the important features of GDP is that it is influenced by thepopulation of an economy and hence GDP per capita is also used by an economist in order toget a good insight regarding an economy (Hosseinzadeh et al. 2016). There are few of thecomponents of GDP which contributes to the overall final goods and services of theeconomy. In terms of the sector, the contribution can also be categorised into differentsectors. These involve the service sector, manufacturing sector, agricultural sector and manymore. The performance of these sectors creates the difference among the economicperformance of different countries. The objective of this paper is to shed light on theeconomic performance and GDP of Australia in the last five years. Australia is one of wealthiest economies in the world with a total wealth of 8.9 trillion USdollars. The per capita wealth of the country is second largest standing just after Switzerland.One of the interesting feats of the Australian economy is that it is the only developedeconomy in the world which has maintained a positive growth rate for a long period of time.One of the recent events that have assisted the economy is the mining boom that itexperienced in the year 2004 (Manalo, Perera and Rees, 2015). The economy of Australia isalso a favourable destination for new businesses due to the policies of the government and thetax structures. 2.0 The GDP and the economic growth of Australia in the last five years2.1 The service sector of the economy and its contribution to the growthThe service sector of the Australian economy is the largest sector both in terms of theproduction and the employment that it generates for the people of the economy. In the year,the service sector of the economy accounted for around 70% of the overall GDP of thecountry. In addition to that this sector employed more than 73% of the labours of the market.Although the figures have changed in the year 2017, the influence on service sector on theGDP and the economic growth of the economy is still immense (Peeling et al. 2015).
4According to the figure of the year 2017, the service sector of the economy has reduced to69% and the employment in the sector has become 67% of the overall employment of them inthe economy. Rees, Smith, and Hall (2016) commented that, despite the shrink in the servicesector of the economy, its productivity has increased over the years. Therefore, thecontribution of the service sector has remained almost the same compared to its contribution5 years ago. Australia provides a range of quality services both to the economy of Australia and othereconomies of the world. Burke et al. (2017) pointed out that Australia provides IT servicesfor the other economies of the world. The other effective service sector of the economy is theeducation, tourism, financial services and many more. It is important to note that, since theyear 2014, the inflow of investment in Australian economy has increased manifold.Muhammad et al. (2015) pointed out that, this is due to the liberal policies of the governmentthat followed after the mining boom that it experienced. During the mining boom, the centralbank of Australia drastically reduced the interest rates of the country which reduced theattractiveness of Australian economy as an FDI destination.2011201220132014201520162017010000000000200000000003000000000040000000000500000000006000000000070000000000FDI InflowFDI InflowFigure 1: The FDI inflow in the Australian economy(Source: Hartigan and Morley, 2018)Another important factor that can explain the growth of Australian economy is the sector-wise growth in the services. For example, the educational service provision of the economyhas grown from $17 billion USD to $21 billion USD in the year 2016 (Cummings, 2016). In
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