Analyzing Australia's Economic Condition: A Detailed Business Report

This report provides an analysis of the current economic condition of Australia using macroeconomic concepts such as GDP, unemployment rate, and price levels. It examines the trends in these indicators over the past five years and utilizes the Keynesian model to assess consumption expenditure, government expenditure, investment expenditure, and net export. The report forecasts Australia's economic performance for the next six months, predicting a potential increase in GDP, while also considering potential challenges like political and economic instability in China. Furthermore, it discusses the future cash rate of the Reserve Bank of Australia, suggesting the implementation of expansionary fiscal policy to manage inflation. The conclusion highlights a potential increase in GDP and a decrease in the cash rate, indicating a stable economic outlook for Australia.

Running head: BUSINESS REPORT ON AUSTRALIAN ECONOMIC CONDITION
Business report on Australian economic condition
Name of the student
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1BUSINESS REPORT ON AUSTRALIAN ECONOMIC CONDITION
Executive Summary:
This report intends to find the present economic situation of Australia with the help of some
macroeconomic concepts. After that, a prediction can be done related to future performance
of this country for the next 6 months. Moreover, a trend of cash rate movement of Australia’s
central bank can also be discussed over here.

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Table of Contents
Introduction:...............................................................................................................................3
Resent Australian situation based on Macroeconomic concept:................................................3
Economic performance in the next 6 months:............................................................................5
Future cash rate of the Australian central bank:.........................................................................6
Conclusion:................................................................................................................................6
References:.................................................................................................................................7

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Introduction:
The economic condition of Australia has remained highly developed along with its
mixed economic structure. This report intends to describe about the present economic
situation of this country in the light of macroeconomic variables, for instances, national
income, consumption expenditure and investment expenditure (MacLachlan, Biggs, Roberts
and Boruff 2017). After that, the report is going to forecast the economic performance of
Australia for the next six months and based on this, the future trend of cash rate of the
Reserve Bank of Australia can also be discussed.
Resent Australian situation based on Macroeconomic concept:
To understand the recent economic condition of Australia, three indices are needed to
discuss, that are gross domestic product (GDP), price level and unemployment rate of
Australia. The economic condition of this specified country can be understood through
changing trend of GDP.

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Figure 1: GDP trend of Australia (2013-2018)
Source: (tradingeconomics.com 2018)
It can seen from the above figure that the GDP of Australia has fluctuated drastically
over the last five years. This growth rate increased at a slower rate.
Figure 2: Unemployment rate of Australia (2013-2018)
Source: (tradingeconomics.com 2018)
The unemployment rate of Australia has decreased significantly, which in turn has
indicated a positive economic condition of this country. In 2017, this rate has remained at
5.7% though at the initial phase of 2018, this rate has increased by a small percentage
(tradingeconomics.com 2018). Moreover, the retail price level has remained at a lower level
and has decreased further in the second quarter of 2017.
With the help of Keynesian model, the economic condition of Australia can be
analyzed more precisely (Benigno 2015). This model has focused chiefly on four economic

5BUSINESS REPORT ON AUSTRALIAN ECONOMIC CONDITION
indicators, which are consumption expenditure, government expenditure, investment
expenditure and net export.
Figure 3: Personal consumer expenditure of Australia (2013-2018)
Source: (tradingeconomics.com 2018)
The above figure has represented an increasing trend of the country’s personal
consumer expenditure after the present president of the U.S.A has come into power. This
indicates that Australia’s economic condition is achieving a better position
(tradingeconomics.com 2018). In addition to this, the present condition of the country’s
investment expenditure and government expenditure have experienced positive trend, which
have affected the country’s economy in a positive way. However, the country’s net export has
affected adversely due to unstable economic condition of the global economy.
Economic performance in the next 6 months:
Based on those macroeconomic variables, it can be predicted that the economic
condition of Australia is going to increase in the next 6 months and at the end of 2018, it can
be reached nearly at 3% (Johnson and Mitchell 2017). However, due to political and

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economical instability, especially in China, the net export of Australia can be decreased
further while the level of unemployment may remain at the same position.
Future cash rate of the Australian central bank:
The central bank Australia can implement expansionary fiscal policy to decrease the
cash rate, which in turn can decrease the interest rate of banks in future (Makin, Robson and
Ratnasiri 2017). Through this policy, the government can control the increasing inflation rate
of Australia.
Conclusion:
After discussing all macroeconomic variables, it can be concluded that the GDP of
Australia can be increased in next 6 months while the cash rate may be decreased during the
same period. At present, the GDP of this country is increasing at a slower rate. Hence, by
considering entire impacts, it can be said that the economic condition of Australia is attaining
a stable position.

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References:
Benigno, P., 2015. New-Keynesian Economics: An AS–AD View. Research in
Economics, 69(4), pp.503-524
Johnson, P. and Mitchell, I., 2017. The Brexit vote, economics, and economic policy. Oxford
Review of Economic Policy, 33(suppl_1), pp.S12-S21..
MacLachlan, A., Biggs, E., Roberts, G. and Boruff, B., 2017. Urban growth dynamics in
Perth, Western Australia: using applied remote sensing for sustainable future
planning. Land, 6(1), p.9.
Makin, A.J., Robson, A. and Ratnasiri, S., 2017. Missing money found causing Australia's
inflation. Economic Modelling, 66, pp.156-162.
Tradingeconomics.com. (2018). Australia Consumer Spending | 1959-2018 | Data | Chart |
Calendar. [online] Available at: https://tradingeconomics.com/australia/consumer-spending
[Accessed 3 Apr. 2018].
Tradingeconomics.com. (2018). Australia GDP Growth Rate | 1959-2018 | Data | Chart |
Calendar | Forecast. [online] Available at: https://tradingeconomics.com/australia/gdp-growth
[Accessed 3 Apr. 2018].
Tradingeconomics.com. (2018). Australia Unemployment Rate | 1978-2018 | Data | Chart |
Calendar. [online] Available at: https://tradingeconomics.com/australia/unemployment-rate
[Accessed 3 Apr. 2018].