Australia Economic Report
Introduction
This article is about Steen Jakobsen who works in the economic department since he was a teenager. Jakobsen says that the economy of the United States is not improving further. He continues to say that in the last few years cold weather has been used as a justification for decline in employment services, marketing services, gross product tremendous decrease and decline in the manufacturing industries and businesses. Jakobsen is seen to make predictions in the current economic conditions. He made predictions for the Saxo bank including Germanys economic down fall and French oil supply declining by 40%. He warned the Australian economists’ especially regional investors of depending much on the current economic gains in the market. Low interest rates should not be associated with an economic gain. The high rate of unemployment and decline in productivity as he says signifies a loss in the economy not a gain as many people mistake. He says that Australia is the only country where housing marketing is acceptable and portraying a gain in that market. The unions in Australia advocate for high rates of payment when the productivity is actually declining suggesting that the economy is in danger. Australia refers itself as being lucky whereas its economy is in danger as it lags behind other countries in the economic status especially because of its mining industry. This report will analyze the economic growth rate of Australia, microeconomic and GDP as well as inflation rate in Australia which affects economic growth and development
Economic concepts and theories applied
According to the economic concept of scarcity, jakobsen suggests that Australia is facing difficulties in the mining industry. The resources since they are non renewable are becoming scarce which signifies a decline in the economy of Australia. The market system in Australia is not reliable enough since many customers do not enjoy most things because of scarcity. The economy of Australia is made up of 68% GDP. Economic growth and development in Australia is mainly as a result of the mining and agricultural sector where products are exported to countries in Africa (Baker, 2014). The mining sector contributes 10% of the GDP with 9% of other mining services making it to 19% of the total Australian GDP. The Australian security exchange is the largest exchange in Australia based in Sydney where it is ranked 9th in the globe. Australia is seen as one of the countries with the biggest companies and industries globally. Australian dollar is commonly used in the states in Australia (Baker, 2014).
Economic history of Australia
Annual percentage growth in real (chain volume) GDP per capita since 1961
The GDP growth rate is currently at 4.3%. It has increased from the research carried out in the previous years. The economic growth has faced struggles especially in 2013 where it is hoped that it will pick well this year. Elections tampered with the economic growth in 2013. The mining industry which attracts many regional and international investors is rising in 2014. The US economy decline as well as China’s affected the economic growth of Australia in 2013 which made it have a negative impact in 2014 (Baker, 2014). The rate of unemployment is declining in this year which will boost the economic growth rate. The Reverse bank of Australia is currently cutting off high interest rates where it will increase them later in the year as economic growth returns back to normalcy. Share markets are in support that the economy is improving as a result of high levels of employment and growth in business investment. This improve in economy signifies excellent revenue collection as well as profits (Baker, 2014). Australian people adapt a conservation culture in the past few years. They are used to saving instead of spending where most of their finances stay at the banks. Consumers in this country are used to online shopping services which helps them compare different products from different companies with the help of internet. The Aussie dollar is currently enabling regional retailers gain profits since it has made it possible for all shoppers globally shop online. Increase of Conservatism means that low interest levels will remain as well as inflation rate remaining controlled to required levels (Meredith & Dyster, 2012). For the revenue to be made standard, retailers have to reduce costs of products and improve customer care services in order to maintain the margin. Global competition is always present therefore for Australia to maintain its economic rise; the Aussie dollar must remain easy.
Unemployment rate in Australia
The rate of unemployment in Australia was constantly high in the past years. Currently Australia is reducing the numbers of unemployed individual with the aim of improving its economy. The teenage together with youth unemployment rate is of great concern in the country. Up to the year 2013 the rate of unemployment was 10.4% with many part time workers as well as casual workers. The rate of unemployment has decreased from 10.4% to 5.2% currently. This signifies a positive impact on the economy of Australia. Australia has suffered economic decline because of unemployment issues which it is currently bringing it to an end. Different media differ in defining the unemployment rate where the Australian government is questioned over the issue of unemployment.
High unemployment levels leads to a negative mark on the GDP resulting to decline in economic growth rate. Currently and especially in 2014, it is seen that unemployment level is decreasing signifying a positive growth in the economy. High employment rate signifies reduction in the rate of inflation. The recession in Australia impacted negatively on the employment rate which has been recovered currently as employment opportunities are now available.
GDP growth and inflation
For a country with a current GDP of $ 1.521 trillion USD, Australia poses as a country with high potential, as well as many opportunities for investment. In addition to its projected growth in the backdrop of stable political environment, scientific and technological advances, the commercial boom and favorable climatic as well as Geographical aspects, Australia will continue to attract investment (Meredith & Dyster, 2012). Its immunity from the current Aussie crisis has been instrumental in attracting investment away from the traditional Australia market, as well as the flooded Chinese market. All these are achieved using political economic analysis results. Increase in the inflation rate suggests a decline in economic development. The economic decline of China and United States affects the growth and GDP of Australia. The mining and agricultural sector has a big impact on the GDP of Australia as well as the government budget. Australia is a well known exporter of agricultural and mining products which boost its economy (Meredith & Dyster, 2012).
Australian GDP growth and inflation
Macroeconomic policy in Australia
The government of Australia currently and in the past has always worked to achieve positive economic growth, internal and external balance in the current economy. The objectives are achieved in order to sustain a positive rise in economic growth as well as regulating the rate of inflation in the country. The objectives are achieved in order to reduce liabilities and huge debts to other countries. The objectives promote growth in the economy as well as national development and growth. Macroeconomic policy is used by the government in order to minimize variations of the international business sequence. This is done by manipulating demand to enable continuous growth thereby enhancing low levels of inflation as well as unemployment. Macroeconomic policy is used hand in hand with the microeconomic policy involving supply in order to enhance success of the economy. In order to pressure the demand as well as economic growth two policies are used by the government which include fiscal together with monetary policies. Fiscal policy involves the use of the budget as a way of influencing economic aims by varying total expenditure and revenue of the government. This in turn changes the level of economic development with either excess or shortage in the fiscal policy as well as a balanced budget. The budget is capable of influencing the economy of Australia. The economy can too cause an impact in the result of the economy. Reduced rate of spending as well as required government revenue leads to a positive gain in the economy. Economic Growth can be outcome when the budget of the government suggests a reduction in the rate of taxation and an increase in the government expenses and spending.
Conclusion
As a well endowed country, with a large manpower resource, favorable climatic and geographic conditions and strategic placement, Australia is well placed to reap the benefits of international trade. As is the case with such countries, corruption poses as a major hindrance to the realization of its objectives, but the recent drive at reducing this vice has served to attract foreign investment (Anderson, 2009).The execution of FDI analysis has markedly assisted to improve the country’s chances in enabling it to improve the chances of foreign investment within its boundaries as evidenced by the sharp rise in foreign direct investment in recent times. Such is expected to be instrumental in realizing the forecasted national growth to above 3 trillion in the future. Australia being a country rich in natural resources and man power should work hard to maintain its upward trend in economic growth (Anderson, 2009). Economic growth is necessary and should be continuous. Australia should create employment facilities to its people in order to achieve positive results in the economy.
References
Anderson, K. (2009). Australia's economy in its international context: The Joseph Fisher lectures. Adelaide: University of Adelaide Press.
Baker p (2014) Australia not lucky just isolated says Saxo Bank chief economist Steen Jakobsen
Meredith, D., & Dyster, B. (2012). Australia in the global economy: Continuity and change. New York: Cambridge University Press
