Weekly Country Focus: Australia

The Economy of Australia is a prosperous, Western-style market economy dominated by its services sector (68% of GDP), though the agricultural and mining sectors (29.9% of GDP combined) account for 65% of its exports. Rich in natural resources, Australia is a major exporter of agricultural products, particularly grains and wool, and minerals, including various metals, coal, and natural gas.

Australia occupies a continent close to the size of the contiguous United States. Service industries have expanded in recent decades at the expense of the manufacturing sector, which now accounts for just under 12 per cent of GDP.

Australia's emphasis on reforms is often cited as a key factor behind the continuing strength of the economy. In the 1980s, the Australian Labor Party, led by Prime Minister Bob Hawke and Treasurer Paul Keating, commenced the modernisation of the Australian economy by floating the Australian dollar in 1983, leading to full financial deregulation.

Current areas of concern to some economists include Australia's large current account deficit, the absence of a successful export-oriented manufacturing industry, a real estate bubble, and high levels of net foreign debt owed by the private sector.

Trade and economic performance

In the second half of the twentieth century, Australian trade shifted decisively away from Europe and North America to Japan and other East Asian markets.

Despite high global demand for Australian mineral commodities, export growth has remained flat in comparison to strong import growth. Even though Australia enjoys high commodity prices, economists have warned that structural change is needed in order to increase the size of manufacturing sector. The Australian economy has been performing nominally better than other economies of the OECD and has supported economic growth for 16 consecutive years. According to the Reserve Bank of Australia, Australian per capita GDP growth is higher than that of New Zealand, US, Canada and The Netherlands. The performance of the Australian economy is heavily dependent on US and Chinese economic growth.

Currency
Australian Dollar ($A or A$, AU$ or $AU, AUD)

GDP (PPP)
$645.3 billion (2006 est.)

GDP growth
3.8% (Q2 2007)

GDP per capita
$32,900 (2006 est.)

Inflation (CPI)
2.1% (Q2 2007)

Unemployment
4.3% (Q2 2007)

Main industries
Mining, industrial and transportation equipment, food processing, chemicals, steel