Australia : Economy

Economy

GNI: 
US$1,524.3bn
GNI PC: 
US$65,520
GDP Growth: 
2.4% p.a. 2009–13
Inflation: 
2.5% p.a. 2009–13

Australia has a high degree of prosperity, based on its wealth of natural resources, policies of redistribution and welfare, and stable democratic society. Its economy is among the largest in the world, ranking 19th in terms of GDP (PPP) in 2014 (IMF, April 2015). Significant minerals include aluminium, coal, copper, diamonds, gold, iron, nickel, oil and gas, silver, tin, titanium, uranium and zinc. Proven reserves of oil were estimated in January 2014 to be 4.0 billion barrels, and of gas, 3.7 trillion cubic metres. The economy relied mainly on agriculture and mining until manufacturing boomed after World War II. Service industries have since led growth, rising from about 60 per cent of GDP in the 1960s to about 70 per cent in the 2000s.

However, the economy remained vulnerable to variations in agricultural output and fluctuations in world commodity prices. There has been a high level of foreign investment resulting in a serious current account deficit as interest and dividends leave the country; domestic investment has been relatively low.

From the 1980s major economic reforms were introduced, including liberalisation of trade and foreign investment, deregulation of the financial system and markets, privatisation of public enterprises and government services, and decentralisation of wage settlements.

During the 2000s the economy grew well, averaging three to four per cent p.a. until the last quarter of 2008 due to the global economic downturn and consequent falls in commodity prices. With slower growth of 1.7 per cent in 2009, unemployment rose, after reaching its lowest level since the 1970s in early 2008 (4.0 per cent), but the economy was stronger from 2010, growing by 3.7 per cent in 2012 and 2.5 per cent in 2013, and an estimated 2.8 per cent in 2014.