Australia Economic Progress Report

RMIT University
MACROECONOMICS
STUDENT ID:
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Australia Economic Progress Report
Current Events
A significant event from the perspective of domestic Australian economy is the minutes of
the latest Monetary Policy Committee released on March 2019. About an year ago, the RBA
was looking to increase the cash rate but the persistent economic conditions (both domestic
and global) have not allowed for the same as status quo has been maintained. In the recent
minutes, the slowdown in China has been addressed coupled with deterioration in the leading
indicators related to unemployment (RBA, 2019). This is leading to a strong expectation of a
rate cut of 25 bps in the current year by RBA.
The cash rate is significant since it would impact the interest rate which would in turn impact
various macroeconomic variables indicated below (Mankiw, 2016).
 Aggregate demand would increase owing to lowering of interest rates by banks.
 This would potentially lead to higher inflation coupled with higher GDP growth in the
medium term.
 Additionally, on account of higher consuming spending, it is expected that private
investment cycle would be kicked off.
 Also, there would be a depreciation in the currency as money might move from the debt
funds owing to better interest rates being offered elsewhere.
 The credit growth may improve along with providing much needed support to the real
estate market which is the verge of collapsing especially as China enters a slowdown.
GDP Highlights
The requisite excel chart indicating GDP per capita from June 1981 to June 2018 is illustrated
as follows.

The two consumption categories which witnessed the largest growth rate over the most recent
quarter are transport services and insurance & other financial services.
Labour Market Highlights
The requisite excel chart for the comparison of overall unemployment rate with the respective
unemployment rate of male and females over the entire period is illustrated as follows.
 “Community and Personal Services” is the occupation which has witnessed the most
percentage change in the most recent quarter.
 The occupation category which has switched in terms of gender concentration is
“Professionals”.