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flag Australia Australia: Economic and Political Outline

In this page: Economic Indicators | Foreign Trade in Figures | Sources of General Economic Information | Political Outline

 

Economic Indicators

Since the 2000s, Australia's growth has been driven by the mining boom. Australia is the only country of the OECD that did not enter into recession during the financial crisis. The Australian economy experienced an increasing revival since 2010. Its growth rate declined in 2013 (+2.5% of GDP) a reduction which was due to the conclusion of the relaunch policies and to a drop from the Chinese demand in exports. The mining sector represents about 20% of the GDP, but the investments are declining. Australia has many other assets: a massive export of agricultural products, a solid domestic demand and a strong financial sector.

The Australian economy is in an enviable situation: the country's public debt is the lowest in the OECD, it has a surplus budget and a sustainable economic growth. Nonetheless, the government remains ready to respond to the potential effects of the crisis in the Euro-zone. At the end of 2012, the Central Bank intervened, lowering interest rates to their minimum since 2009. The voluntary policy of the government to face the international crisis was very successful, with social plans, investments in health services and infrastructures and measures to increase labor productivity. The government is also trying to improve the country's competitiveness, especially in relation to the competition of Asian exports, as well as to respond to the challenges presented by an aging population and the country's climatic problems (droughts, floods). The Australian economy has benefited from the growth of the Asian countries with which the country does its trade. Australia wishes to conclude a free-trade agreement with China, which is its main trade partner. Asia absorbs the essential exports and ensures the majority of the country's imports. Australia also keeps strong relations with the western countries, notably with the United States. Lastly, the mining activity induces a very fast-paced economy, which makes its economic diversification an imperative issue. The strong appreciation of the national currency has weakened the manufacturing sector and the tourism, strengthening its dependence on the mining sector.

Australia is a prosperous country and its GDP per capita is amongst the highest in the world. Despite the recent increase of the unemployment rate due to the global recession, this rate remains under control at around 5%, even though, it is slightly increasing due to the slowdown of investments in the mining sector. In 2013, Australia ranks as the second best country in the index of human development of the world. The country will be, however, affected by global warming. The conservative government, in power since September 2013, has repealed all the environmental measures in order to sustain the industry sector.

 
Main Indicators 20112012201320142015 (e)
GDP (billions USD) 1,498.371,555.631,505.92e1,482.541,534.60
GDP (Constant Prices, Annual % Change) 2.63.62.32.82.9
GDP per Capita (USD) 66,53467,8636462,822e64,257
General Government Balance (in % of GDP) -4.4-3.5-3.3e-3.0e-1.8
General Government Gross Debt (in % of GDP) 24.327.128.630.630.7
Inflation Rate (%) 3.31.82.52.72.6
Unemployment Rate (% of the Labor Force) 5.15.25.76.26.1
Current Account (billions USD) -44.79-67.83-49.85e-54.15-58.34
Current Account (in % of GDP) -3.0-4.4-3.3e-3.7e-3.8

Source: IMF - World Economic Outlook Database , Last Available Data

Note: (e) Estimated Data

Main Sectors of Industry

The tertiary sector occupies a dominant position in the Australian economy (more than three-fourths of the GDP), but the agricultural and mining sectors are the most important for its exports. Australia is a vast agricultural country and one of the world's main exporters of wool, meat, wheat and cotton. The country is overflowing with mineral and energy raw materials and the export of these ensures the country with substantial revenues. Australia is among the top 10 producers and exporters of most mineral ores. It has the world's largest reserves of numerous strategic resources such as uranium, of which it holds 40% of the world's confirmed reserves.

Traditionally, Australia is an importer of finished goods. Its industrialization is fairly recent, a fact which explains the small scale of its manufacturing sector, which only employs one-fifth of the active workforce. The manufacturing industry is built up around the food industry (approximately one-fifth of the workforce), machinery and equipment (around 20%), metal processing and metal goods (nearly 20%) and the chemical and petrochemical industry (slightly more than 10%).

 
Breakdown of Economic Activity By Sector Agriculture Industry Services
Employment By Sector (in % of Total Employment) 3.3 21.1 75.5
Value Added (in % of GDP) 2.4 26.8 70.7
Value Added (Annual % Change) -0.6 2.5 2.8

Source: World Bank - Last Available Data.

 
 
 
Monetary Indicators 20092010201120122013
Australian Dollar (AUD) - Average Annual Exchange Rate For 1 USD 1.281.090.970.971.04

Source: World Bank - Last Available Data.

 
 

Learn more about Market Analyses about Australia on Globaltrade.net, the Directory for International Trade Service Providers.

Indicator of Economic Freedom

Definition:

The Economic freedom index measure ten components of economic freedom, grouped into four broad categories or pillars of economic freedom: Rule of Law (property rights, freedom from corruption); Limited Government (fiscal freedom, government spending); Regulatory Efficiency (business freedom, labor freedom, monetary freedom); and Open Markets (trade freedom, investment freedom, financial freedom). Each of the freedoms within these four broad categories is individually scored on a scale of 0 to 100. A country’s overall economic freedom score is a simple average of its scores on the 10 individual freedoms.

Score:
82.0/100
Position:
Free
World Rank:
3/178
Regional Rank:
3/25

Distribution of Economic freedom in the world
Source: 2014 Index of Economic freedom, Heritage Foundation

 

Business environment ranking

Definition:

The business rankings model measures the quality or attractiveness of the business environment in the 82 countries covered by The Economist Intelligence Unit’s Country Forecast reports. It examines ten separate criteria or categories, covering the political environment, the macroeconomic environment, market opportunities, policy towards free enterprise and competition, policy towards foreign investment, foreign trade and exchange controls, taxes, financing, the labour market and infrastructure.

Score:
8.29
World Rank:
5/82

Source: The Economist - Business Environment Rankings 2014-2018

 

Country Risk

See the country risk analysis provided by Coface.

 

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Foreign Trade in Figures

Australia is very open to international trade, which represents almost 45% of the country's GDP (average value for 2009-2011).

The foreign trade of Australia was characterized by a structural trade deficit until 2007, but since then, the country has been alternating between periods of surplus and periods of deficit. In 2013, exports increased 6% and the trade deficit was reduced by 67% (about USD 7 billion of deficit at the end of 2013). The agricultural exports, in particular, were very dynamic. In a structural way, the international trade highly depends on the Chinese economic situation, the prices of raw materials and the value of the Australian dollar.

Australia is accelerating its integration into the Asia-Pacific area. Its main trading partners are the Asian countries (especially China), the United States and the European Union. In 2013, Australia started negotiations with China in order to conclude a free-exchange treaty.

 
Foreign Trade Indicators 20092010201120122013
Imports of Goods (million USD) 165,471201,639243,701260,940242,132
Exports of Goods (million USD) 154,331212,634270,387256,680252,728
Imports of Services (million USD) 40,70050,54360,52863,15362,162
Exports of Services (million USD) 40,91145,81650,84852,24052,170
Imports of Goods and Services (Annual % Change) -3.76.410.311.60.7
Exports of Goods and Services (Annual % Change) 1.85.10.95.06.0
Imports of Goods and Services (in % of GDP) 22.420.420.121.521.1
Exports of Goods and Services (in % of GDP) 22.519.521.221.319.9
Trade Balance (million USD) -7,47511,33522,481-12,1874,390
Trade Balance (Including Service) (million USD) -10,0366,18612,237-24,558-9,664
Foreign Trade (in % of GDP) 45.039.941.342.841.0

Source: WTO - World Trade Organization ; World Bank , Last Available Data

 

Main Partner Countries

Main Customers
(% of Exports)
2013
China 34.6%
Japan 12.4%
South Korea 7.0%
India 3.4%
United States 3.0%
See More Countries 39.6%
Main Suppliers
(% of Imports)
2013
China 19.3%
United States 10.2%
Japan 7.7%
Singapore 5.2%
Germany 4.7%
See More Countries 52.8%

Source: Comtrade, Last Available Data

 
 

Main Products

- bn USD of products exported in 2013
Iron ores and concentrates, incl. roasted iron...Iron ores and concentrates, incl. roasted iron pyrites 26.7%
Coal; briquettes, ovoids and similar solid fuels...Coal; briquettes, ovoids and similar solid fuels manufactured from coal 15.2%
Petroleum gas and other gaseous hydrocarbonsPetroleum gas and other gaseous hydrocarbons 6.0%
Gold, incl. gold plated with platinum, unwrought...Gold, incl. gold plated with platinum, unwrought or not further worked than semi-manufactured or in powder form 5.3%
Petroleum oils and oils obtained from bituminous...Petroleum oils and oils obtained from bituminous minerals, crude 3.4%
See More Products 43.3%
- bn USD of products imported in 2013
Petroleum oils and oils obtained from bituminous...Petroleum oils and oils obtained from bituminous minerals, crude 8.4%
Motor cars and other motor vehicles principally...Motor cars and other motor vehicles principally designed for the transport of persons, incl. station wagons and racing cars (excl. motor vehicles of heading 8702) 7.6%
Petroleum oils and oils obtained from bituminous...Petroleum oils and oils obtained from bituminous minerals (excl. crude); preparations containing >= 70% by weight of petroleum oils or of oils obtained from bituminous minerals, these oils being the basic constituents of the preparations, n.e.s.; waste oils containing mainly petroleum or bituminous minerals 7.6%
Automatic data processing machines and units...Automatic data processing machines and units thereof; magnetic or optical readers, machines for transcribing data onto data media in coded form and machines for processing such data, n.e.s. 3.3%
Medicaments consisting of mixed or unmixed...Medicaments consisting of mixed or unmixed products for therapeutic or prophylactic uses, put up in measured doses incl. those in the form of transdermal administration or in forms or packings for retail sale (excl. goods of heading 3002, 3005 or 3006) 3.2%
See More Products 70.0%

Source: Comtrade, Last Available Data

 
See More Products
More imports (Intracen Data)
More exports (Intracen Data)
 
 

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Sources of General Economic Information

Ministries
Department of Foreign Affairs and Trade (DFAT)
Australian Government Agriculture Portal
Minister for Finance and Deregulation
Ministers for Innovation, Industry, Science and Research
Australian Bureau of Agricultural and Resource Economics (ABARE)
Statistical Office
Australian Bureau of Statistics
Central Bank
Reserve Bank of Australia
Stock Exchange
Australian Stock Exchange
Search Engines
Anzwers
Ninemsn
Web Search
Wombat
Economic Portals

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Political Outline

Executive Power
Australia an independent nation, belonging to the Commonwealth, and recognizes the British Monarch as its sovereign. Queen Elizabeth II is the Head of State. She is represented in Australia by a Governor General who has a symbolic function (he is appointed by her on the recommendation of the Prime Minister). The Prime Minister is the head of the government. He runs State business. It is the Prime Minister who appoints the Cabinet. The Prime Minister is the leader of the party that wins the majority of seats in the House of Representatives at the General Election.
Legislative Power
The parliament is composed of the Senate and the House of Representatives. Senators are elected for a 6 year term, and the members of the House of Representatives for a 3 year term minimum. The Prime Minister and the Cabinet are responsible to parliament, of which they must be elected members.
Main Political Parties
A bipartisan system with:
- The Liberal Party (conservative, centre-right, neoliberal);
- The Australian Labor Party (social democrat, centre-left).
Also : The Greens, and the National Party (conservative) in coalition with the Liberal Party.
Current Political Leaders
Prime Minister: Anthony John "Tony" ABBOTT (since 18 September 2013) – Liberal Party
Governor General:  Sir Peter COSGROVE (since 28 March 2014)
Next Election Dates
Representatives : November 2016
 

Indicator of Freedom of the Press

Definition:

The world rankings, published annually, measures the violations of press freedom worldwide. It reflects the degree of freedom enjoyed by journalists, the media and digital citizens of each country and the means used by states to respect and uphold this freedom. Finally, a note and a position are assigned to each country. To compile this index, Reporters Without Borders (RWB) prepared a questionnaire sent to partner organizations,150 RWB correspondents, journalists, researchers, jurists and activists of human rights, including the main criteria - 44 in total - to assess the situation of press freedom in a given country. It includes every kind of direct attacks against journalists and digital citizens (murders, imprisonment, assault, threats, etc.) or against the media (censorship, confiscation, searches and harassment etc.).

World Rank:
28/180
Evolution:
2 places down compared to 2013

Source: Worldwide Press Freedom Index 2014, Reporters Without Borders

 

Indicator of Political Freedom

Definition:

The Indicator of Political Freedom provides an annual evaluation of the state of freedom in a country as experienced by individuals. The survey measures freedom according to two broad categories: political rights and civil liberties. The ratings process is based on a checklist of 10 political rights questions (on Electoral Process, Political Pluralism and Participation, Functioning of Government) and 15 civil liberties questions (on Freedom of Expression, Belief, Associational and Organizational Rights, Rule of Law, Personal Autonomy and Individual Rights). Scores are awarded to each of these questions on a scale of 0 to 4, where a score of 0 represents the smallest degree and 4 the greatest degree of rights or liberties present. The total score awarded to the political rights and civil liberties checklist determines the political rights and civil liberties rating. Each rating of 1 through 7, with 1 representing the highest and 7 the lowest level of freedom, corresponds to a range of total scores.

Ranking:
Free
Political Freedom:
1/7

Map of freedom 2014
Source: Freedom House

 

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Last Updates: October 2014