The Health Of Australia 's Economy

Australia’s economic status can be assessed using a range of economic indicators such as unemployment rates, Gross Domestic Product (GDP), inflation rates and interest rates. The economy can affect Australian business’s greatly causing them to flow through the business cycle. The business cycle purpose is to describe the overall trends of the economy and can show growths of high or negative. The four stages in a business cycle are: expansion, this is when the economy has high demands; peak, this is the turning point of the expansions before the economy falls down. A contraction is when the demand for goods and services are low; and trough, is the opposite of a peak. To evaluate Australia’s current economic status factors such as unemployment

This report will show an overview of the current state of the Australian economy and its management by the Federal government through examining economic indicators such as economic growth (GDP), unemployment, inflation and trade.

The figure obviously had not return to pre-crisis level. Moreover, recent commodity prices had fallen significantly which will affect Australia’s short and long term economy.

This has been the result of inflationary pressures due to excessive consumer demand, and a world increase in oil prices, the RBA’s primary objective is to contain inflation at 2-3% whilst also achieving sustainable growth. The current increases in interest rates will result in lower aggregate demand as consumers have less disposable income. This results in reductions in inflationary expectations, and a decrease in the demand for imports. Furthermore higher rates of interest will encourage overseas investment into Australia, thus resulting in an increase in the demand for the Australian dollar. An increase in the demand for the AU$, and a decrease in its supply due to less import expenditure will result in an appreciation of the AU$ in forex markets. Overall this results in depressed economic activity and lower levels of growth. However the RBA has been able to increase interest rates in order to contain inflation while maintaining economic growth. This is because the global economy has continued to grow at record pace, with strong growth in the US and China, and the recovery of Japan and Europe. Consequently demand for Australian exports has remained high, thus creating opportunities for increased production and subsequent economic

The Australian PMI has been mostly below 50 with an average of 47.98 in past 12 months and an average of 47.94 this year, which suggests a likely contraction in manufacturing. Fluctuation is expected due to its volatile nature but a large percentage change is likely to drive the economy. A 14.03% growth in July is expected to lead to an increase in the coming month but contraction may continue in 2015-2016. From these PMI figures, Australia’s economy might not be performing at its best. The industry might suffer

Booms, busts, recessions, and growth; all of the preceding terms are characteristics of a typical market economy. There are times when an economy can flourish spectacularly and there are times when it can fail miserably. Consequently, it is the responsibility of a nation’s central bank to manage these fluctuations through conducting effective monetary policy. The following paper will assume the perspective of the Reserve Bank of Australia (RBA) and critically analyze the past, present, and future of the Australian economy while considering specific sectors.

During the last decade the Australian economy has experienced continuous growth and has featured contained inflation, low unemployment and a strong and stable financial system. By 2012, Australia has experienced more than 20 years of continuous economic growth, averaging 3.5% a year. Australia was comparatively unaffected by the global financial crisis (GFC) in 2008 as the banking system remained strong and inflation was controlled to a manageable point, this event has benefited Australia as a whole allowing the country to excel further than other economies that faced the worst of the Global financial Crisis, a core reason to this resistance is the strong and well established regulatory body systems that Australia had put in place. These

Australian economy is ranked 5th in global ranking while in Asia-pacific regional ranking it’s ranked at 4th. The main components of Australian economy on which it’s based are retail trade 5%, manufacturing 7%, services (including finance) 58% and mining 7% and construction 9%. Currently Australia’s economy is growing at

Outline: This article discusses the low inflation data that adds to the interest rate in the australian economy and highlighting its effects to the economy. Australia’s official inflation rate has risen at its slowest annual pace in nearly three years, adding pressure to the Reserve bank of australia to stimulate the economy. It is stated the figures of inflation has lifted by 0.2 per cent in the three months to March, bringing the annual rate to 1.3 per cent. Low inflation rates leads to no sustained income growth for the Australian workforce. Global oil prices have recently plummeted to five-year lows amid an oversupply pushing local petrol prices under $1 a litre in some areas, from around $1.30 in December.

It is said that the Australian economy was picking up in the March quarter in 2015, although the growth rate of the economy is still below the average over the past year. And there were some early indications that the strength of growing in the June quarter was not as strong as in the March quarter (Rba.gov.au 2015). Different kinds of macroeconomic indicators construct a picture of current macroeconomic conditions in Australia. There are a great number of macroeconomic indicators, three of the most important indicators will be focused as following, such as gross domestic product, consumer price index and labor force.

This essay investigates the possible decision of Reserve Bank of Australia (RBA) about cash rate to be made on 5 May 2015.The appropriated level of cash rate depends on the current economic conditions, both domestically and internationally. Also, it will be based on the three main objectives of monetary policy including price stability, full employment and the stability in economic growth. This essay will discuss the current economic conditions which are consistent to the tendency of cash rate that might be cut from 2.5 to 2 per cent in the next meeting. The essay provides three arguments for this possible decision including the decline in in business investment and business confidence, low commodity prices and the economic growth in major

In relation to International Economics the current account deficit Australia has, has been of some debate in recent years. The current account is the summation of the balance of goods and services and net income and is a component of the balance of payments alongside the capital and financial account. When a deficit occurs in the current account it means that the value of imports (debits) are exceeding the value of exports (credits). The value of the current account has oscillated between the period 2008 to current, however despite these oscillations it has remained a deficit during this period of time. Although a short-term CAD may not necessarily be detrimental to the Australian economy, potentially boosting economic growth beyond its

Labour market conditions are generally better than had been expected since the first rate cut in February 2015, although spare capacity still remains. The unemployment rate over recent months was around the levels that have been recorded over much of the past year. There has been a pick-up in labour demand, which has led to a noticeable rise in the employment-to-population ratio. Some factors that can help explain this include very low wage growth and lower-than-expected population growth. The ABS measure of firms ' job vacancies is consistent with the unemployment rate remaining around levels of recent months or even declining a little in the months ahead. Other indicators point to modest employment growth in coming months (Reserve Bank Of Australia. 2016). The unemployment rate is forecast to be lower than previously anticipated. In part, this reflects the generally better-than-expected labour market conditions of late. The decrease in the unemployment rate

In the year 2008 Australia has seen an increase in its cash rate (also known as Interest rate) twice by 25 basis points. At present the cash rate is 7.25 percent. One of the major reasons for such a tightening of monetary policy is the rising inflation in Australia. Presently Australia is experiencing an inflation rate of 4.2 (Figure 1) percent which is above the Reserve Bank target of 2 to 3 percent. In addition to this, Australian dollar is strengthening against many currencies

In March 2015, Greg Jericho published an article called Weak, weak growth and six things about the state of Australia’s economy that outlined how in the past 6 out of 10 quarters the Australian