Australia Economic Forecast

Australia Economic Outlook

December 13, 2019

Growth was lackluster in the third quarter, restrained by feeble private domestic spending. Falling mining and dwelling investment, despite a loose monetary policy stance, caused fixed investment to dip in the quarter, while meagre wage growth and a higher saving ratio offset recent tax cuts and translated into anemic consumer spending. On the other hand, the external sector continued to support growth, powered by strong commodity exports, which led to a wider current account surplus in the quarter. Turning to Q4, jobs shedding, feeble retail sales in October and downbeat consumer confidence throughout the quarter all point to subdued household spending, while business surveys signal only limited improvements. Meanwhile, at end-November, S&P Global Ratings warned additional fiscal stimulus, encouraged by the Central Bank’s governor, would jeopardize its AAA credit rating. That said, the country’s fiscal metrics remain quite solid.

Australia Economic Growth

Activity is set to strengthen in 2020, buoyed by sturdier domestic demand. Fixed investment should rebound, albeit timidly, as housing and mining investments recover, propped up by looser monetary conditions, improving business sentiment and a turnaround in the housing market, which should also buttress consumption. Weaker demand from China and lingering trade tensions cloud the outlook, however. FocusEconomics panelists expect GDP to expand 2.3% in 2020, which is down 0.1 percentage points from last month’s forecast. In 2021, growth is seen strengthening to 2.6%.

Australia Economy Data

2014 2015 2016 2017 2018
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 %)
Consumption (annual variation in %)-  -  -  -  -  
Investment (annual variation in %)-1.7-1.9-3.6-2.33.3
Exports (G&S, annual variation in %)
Imports (G&S, annual variation in %)-2.0-
Industrial Production (annual variation in %)
Retail Sales (annual variation in %)
Unemployment Rate5.
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)
Inflation Rate (CPI, annual variation in %)
Inflation (PPI, annual variation in %)
Policy Interest Rate (%)2.502.502.001.501.50
Stock Market (annual variation in %)14.80.7-
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-

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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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