AUSTRALIA ECONOMY DETAILS

Boosted by the domestic demand, the Australian Economy has been experiencing a sustained growth since many years.Acccording to IMF this growth is likely to go on. The unemployment rate is historically low, and public debt has reached it’s lowest ever since 20 years. Currently Australia has to face two challenges: its population ageing and its currency rise which weakens its competitively, especially in Asia.
The Australian currency is the Australian dollar. Australia was the first country to implement a complete system of polymer {plastic} bank notes, which are harder to counterfeit and are extremely durable compared to the paper notes.

Australia’s advanced market economy is dominated by its service sectors and also the large bulk is from the agricultural and mining sectors. The relative size of the manufacturing sector has been declining for several decades. Because of the natural wealth of Australia and its small domestic market, the comparative advantage is in its primary products. The service industry occupies a dominant position in the Australian economy, and big companies of the country operate in this sector.

Australia has transformed from an inward looking, import-substitution country to an internationally competitive, export- oriented one. The most important reforms that were included are, floating the Australian dollar exchange rate, deregulating the financial services sector, reducing high tariffs, liberalizing access for foreign bank branches, improving and standardizing the national infrastructure, privatizing many government owned services and public utilities and reforming the  taxation system including introducing a broad based Goods and Service Tax.

The ultimate goal being a competitive producer and exporter of diversified mix of high value added manufacturing products, but also of traditional farm and mineral commodities. In 1990’s Australia was one of the OCED’s fastest growing economies, owing much to the economic reform program. It has been 16 years since Australia experienced a recession, and economic growth remains robust,

The absence of an export oriented manufacturing industry has been considered a key weakness of the Australian economy. Rising prices for Australian’s commodity exports and increasing tourism has to some extent alleviated this.

On January 1, 2005 Australia-U.S Free Trade came into force. Australia has completed FTAs with U.S, Singapore, and Thailand and is pursuing similar Agreements in the region. An ongoing, multibillion dollar resource export contract has driven FTA negotiations with China.