Australia Economy

Australia economy is modern and vibrant, has a strong growth record and has benefited from the resources boom. It has continuously grown since 1991.

Did the global recession impact the Australian economy?

2008 changed the face of the world economy and Australia is not immune to what is happening everywhere else. But the crisis was much milder here than in other countries.

Australia is the 15th richest nation. Its population has one of the highest quality of life, access to good health and education systems, an enviable lifestyle.

Quite a good place to start a new life.

Australian Economy - The Exports

Australia is rich in natural resources, which makes it a strong exporter of commodities. This also helped the country grow faster during the resources boom.

Another major export item are agricultural products. Just 6.5% of Australia's soil is good for agriculture. Drought is a major factor which impacts it negatively.

But the variety of climates and use of high technology makes Australia a strong supplier of food to the world. Food industry is a source of employment and business opportunities in regional areas of the country.

Both resources and agriculture account for just a small proportion of the country's GDP.

Australia Economy - The Services Sector

About 80% of the Australian economy is generated by services: financial, retail, tourism, entertainment, education, health, business services. A truly modern economy.

Setting up a new business in Australia is a fairly easy process. You can start a business in just two days, as compared to an average of 20 days in OECD countries, according to World Bank.

IT and telecommunications are driving the growth and efficiency of Australian economy. Electronic payments and shopping online have become part of the daily routine for the large majority of consumers.

Australians have a continuous love affair with investment, whether in shares or property.

Over 65% of households own their home, with or without a mortgage. Some continue to buy properties and rent them out. Others prefer shares, with more than half of the adult population owning some.

But the general financial crisis was bad news for share investors, with sharp falls in Australian shares after years of very strong growth.

So How Did the Global Crisis Impact Australia Economy?

We did have a mild recession. Australia economy was in a better shape than most of the world economies throughout the crisis.

From a consumer's angle, prices have gone a little bit down and most retailers are having sales. The interest rates are much lower, which means people pay less on a mortgage and have more money available to spend.

House prices have inflated during the boom period. They have not taken a big fall yet, unlike what has happened in other countries. There are more new first home buyers on the market as the government has doubled the first home owner grant from $ 7000 to $ 14000 and even tripled it to $ 21000 for those who build or purchase brand new houses.

Update November 2009

This scheme is being phased out. As of January 2010 the first home owner's grant goes back to $ 7000.

Australian banks are strong and in a much better position than elsewhere. They have a lower exposure to sub-prime debts.

The government put in place an economic stimulus package and increased public spending to "cushion" Australia from recession.

With all our major trading partners deep in recession, Australia may follow suit, but the impact will probably be milder. How much milder, if at all? No crystal ball here...

Still a lucky country, hopefully.

Update November 2009

Australia seems to be one of the first countries that have bounced back from recession. The Reserve Bank increased interest rates twice, in October and November. And the economy is predicted to grow and generate more jobs.

Update November 2010

Another interest rate increase. Predictions are that there will be more next year...

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