Australia Economic Forecast

Australia Economic Outlook

April 26, 2022

Activity likely cooled in Q1 2022, seemingly moving closer to pre-pandemic growth rates following a strong Q4 2021. Retail sales growth in January-February was lower than in Q4. Souring consumer and business sentiment boded poorly for private spending and investment. That said, some support for household spending should have come from a robust labor market. Moving to Q2, the government announced significant fiscal stimulus as part of the new FY 2022–2023 budget—including cash payments to pensioners, tax rebates, and a cut in fuel duty—which should support spending despite a fall in consumer confidence in April. Meanwhile, the Prime Minister called elections on 21 May. Recent polls show that candidates from the ruling Liberal National Coalition and opposition Labor Party are losing votes in favor of minor parties and independent candidates, which could complicate governability.

Australia Economic Growth

The economy should grow at a solid pace this year, supported by improving labor market conditions, the phasing out of Covid-19 restrictions and unleashed pent-up spending amid supportive fiscal and monetary policies. Strong global demand for commodities will buttress the external sector. Tensions with China and higher inflation linked to the Ukraine war pose downside risks. FocusEconomics panelists project GDP to expand 4.0% in 2022, which is unchanged from last month’s estimate. In 2023, the economy is seen growing 2.8%.

Australia Economy Data

2015 2016 2017 2018 2019
Population (million)24.024.424.825.225.6
GDP per capita (USD)51,47451,97055,96156,48854,222
GDP (USD bn)1,2351,2681,3861,4221,386
Economic Growth (GDP, annual variation in %)2.32.82.52.81.8
Consumption (annual variation in %)-  -  -  -  -  
Investment (annual variation in %)-4.0-2.43.52.5-2.2
Exports (G&S, annual variation in %)6.56.93.45.13.2
Imports (G&S, annual variation in %)2.00.17.84.1-1.2
Industrial Production (annual variation in %)1.72.01.23.82.4
Retail Sales (annual variation in %)4.53.72.43.02.7
Unemployment Rate6.15.75.65.35.2
Fiscal Balance (% of GDP)-2.3-2.4-1.9-0.50.0
Public Debt (% of GDP)37.740.541.141.545.0
Money (annual variation in %)13.78.28.92.322.1
Inflation Rate (CPI, annual variation in %, eop)1.71.51.91.81.8
Inflation Rate (CPI, annual variation in %)1.51.31.91.91.6
Inflation (PPI, annual variation in %)1.40.91.61.81.8
Policy Interest Rate (%)2.001.501.501.500.75
Stock Market (annual variation in %)-0.87.07.8-7.419.1
Exchange Rate (vs USD)0.730.720.780.710.70
Exchange Rate (vs USD, aop)0.750.740.770.750.70
Current Account (% of GDP)-4.7-3.3-2.6-2.00.6
Current Account Balance (USD bn)-58.2-41.4-35.4-28.57.8
Trade Balance (USD billion)-13.13.110.030.357.2

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Australia Facts

Value Change Date
Bond Yield1.371.47 %Dec 31
Exchange Rate0.700.05 %Dec 31

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