Australia Economic Progress Report

RMIT University
MACROECONOMICS
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Australia Economic Progress Report
Current Events
A relevant current event with implications for the domestic economy is the policy stance of
the MPC (Monetary Policy Committee) in March 2019. While the cash rate has remained
static at 1.5% over the last year, the key aspect is the rising concerns on global growth
particularly with regards to China. The latest minutes of the MPC highlight the risks posed to
the Australian economic recovery by the slowdown in China. Also, the continuation of trade
war between US-China do not auger well for global commodity trade (RBA, 2019). The net
impact is that the market participants are confident of a future rate cut as early as by the end
of calendar year 2019 so as to give a boost to the ailing domestic economy.
It is expected that reduction of cash rate would lead to reduction of interest rate. This would
trigger an increase in the aggregate demand as there would be higher demand for credit. This
is expected to lead to increased spending by consumers (Arnold, 2015). This in-turn would
lead to uptick of private investment cycle as new capacities would be required to fulfil the
higher demand. Unemployment is also expected to decrease on account of higher economic
activity. However, this might lead to higher rate of inflation in the short run which may
adversely impact the currency rate (Mankiw, 2014).
GDP Highlights
The appropriate graph drawn in Excel depicting GDP per capita trend is illustrated as
follows.
.

The two consumption categories that have registered the highest growth rate in the most
recent quarter are stated below.
 Transport Services
 Insurance & Other Financial Services
Labour Market Highlights
The required graph for unemployment comparison of all population with the two genders is
illustrated below.