Australia Economic Forecast

Australia Economic Outlook

October 19, 2021

The economy seemingly went into a downturn in the third quarter, following a robust domestic demand-driven performance in Q2, as lockdown restrictions were reinstated amid rising Covid-19 infections. Retail sales shrank in July-August, which, coupled with weaker consumer confidence in the quarter, bodes ill for household spending. Moreover, business sentiment turned markedly pessimistic in July-August, suggesting restrictions weighed on investment activity. Turning to Q4, the banking regulator tightened home loan requirements in early October in a bid to cool rising house prices. Meanwhile, Sydney emerged from lockdown at the start of October and restrictions are set to be further lifted, with Melbourne following suit, boding well for activity in the quarter. Moreover, the government is aiming to reach a trade deal with the EU by end-2022, which would boost the trade sector.

Australia Economic Growth

The economy should expand at a healthy rate in 2022. Accumulated savings and the lifting of restrictions amid expansionary fiscal and monetary policy stances and a flexible economy will boost domestic activity, while strong global demand for commodities will rekindle exports. That said, tensions with China and elevated energy prices pose downside risks. FocusEconomics panelists project GDP to expand 3.3% in 2022, which is down 0.1 percentage points from last month’s estimate. In 2023, the economy is seen growing 2.9%.

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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