Australia Economic Forecast

Australia Economic Outlook

September 17, 2019

Growth was resilient in Q2, as the external sector’s improved performance offset weakening domestic demand. Strong LNG exports were behind robust external metrics, and led to the first current account surplus since 1975. That said, a protracted downturn in the real estate market and a challenging global backdrop hindered investment. Data for Q3 points to a pick-up in activity. Although consumer confidence was downbeat in the quarter and retail sales dipped at the outset of Q3, job growth was strong in July. Moreover, household spending should be spurred by expansionary fiscal measures and more favorable lending conditions following the Central Bank’s recent expansionary moves, which are also fueling a recovery in mortgage approvals and real estate prices. That said, business sentiment remains frail amid resurging trade tensions, which nonetheless haven’t yet crept into export data, which remained quite strong in July.

Australia Economic Growth

Growth should weaken this year on falling real estate investment and softening consumer spending. However, it’s seen accelerating in 2020, thanks to rising mining and housing investment, and more accommodative monetary policy. That said, uncertainty surrounding the global—and particularly China’s—growth outlook and trade tensions could discourage investment. FocusEconomics panelists expect GDP to expand 2.0% in 2019 and 2.5% in 2020, which is unchanged from last month’s forecast.

Australia Economy Data

20132014201520162017
Population (million)23.323.624.024.424.8
GDP per capita (USD)65,17361,61851,48652,02355,953
GDP (USD bn)1,5181,4571,2351,2691,386
Economic Growth (GDP, annual variation in %)2.12.62.52.82.4
Consumption (annual variation in %)-  -  -  -  -  
Investment (annual variation in %)-1.7-1.9-3.6-2.33.3
Exports (G&S, annual variation in %)5.86.96.56.83.4
Imports (G&S, annual variation in %)-2.0-1.42.00.17.7
Industrial Production (annual variation in %)1.94.51.62.01.0
Retail Sales (annual variation in %)3.25.54.53.72.4
Unemployment Rate5.76.16.15.75.6
Fiscal Balance (% of GDP)-1.2-3.0-2.3-2.4-1.9
Public Debt (% of GDP)30.734.137.840.540.7
Money (annual variation in %)8.76.310.96.55.4
Inflation Rate (CPI, annual variation in %, eop)2.81.71.71.51.9
Inflation Rate (CPI, annual variation in %)2.42.51.51.31.9
Inflation (PPI, annual variation in %)1.61.71.40.91.6
Policy Interest Rate (%)2.502.502.001.501.50
Stock Market (annual variation in %)14.80.7-0.87.07.8
Exchange Rate (vs USD)0.890.820.730.720.78
Exchange Rate (vs USD, aop)0.970.900.750.740.77
Current Account (% of GDP)-3.2-3.2-4.7-3.3-2.6
Current Account Balance (USD bn)-48.5-46.8-58.7-41.6-35.4
Trade Balance (USD billion)20.311.9-13.13.110.0

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Australia Facts

ValueChangeDate
Bond Yield0.931.47 %Sep 04
Exchange Rate0.680.05 %Sep 04
Stock Market6,6560.08 %Sep 04

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