The economy of Australia has emerged one of the most stable in the world and has not faced recession in the last 25 years, thanks to its affluent resources. Its economy has gained further momentum in the concluding quarter of 2016.
This brings Australia very close to the record of Netherlands for having the economy with unhindered economic growth in the modern times, as quoted by the BBC.
The economy of Australia had slowed down in the third quarter of 2016 but its astonishing 1.1% increase leveraged back the yearly growth rate figures to 2.4%. This revival chiefly owed to the large consumer spending and strong exports. In the last quarter of 2016 agriculture and mining witnessed comparatively strong growth.
Coal and Iron Ore are the biggest exports of Australia and decreased demand from China for mining has halted the boom in the mining sector and adversely impacted the economy of Australia.
Ever since June 1991 Australia has not witnessed a recession which is defined as negative growth in consecutive two-quarters. It is now mere one-quarter behind the record that has been set by New Zealand for the period 2008- 1982. Australia is severely dependent on prices of global commodities.
Austrian Treasurer Scott Morrison has warmly greeted the 2% increase in business investment in December last year which was the first increase after several quarters that witnessed a decline.
He said that Australia’s growth remains above the average of OECD which affirms the flourishing change that is being witnessed by the nations’ economy. The Australian economy has moved from the largest resources boom of its past to a more inclusive and wide growth, added Morrison.
It has also been confirmed by the analysis of ANZ that the weak figures of the third quarter were momentary and the fundamental impetus of the Australian economy remains firm.
It was also quoted by Paul Dales, the chief economist from capital economic that the economy of Australia was confidently on the right growth track. He said that the recent recovery in the last quarter of 2016 not only allays fears regarding recession in Australia but also accentuates hopes that the rise in prices of commodities will result in fast-paced recovery.
It was also reported by the BBC that AMP Capital’s Shane Oliver was quoted as saying that the prospect for 2017 is definitely bright with the surge in volumes of exports and a similar rise in chief commodity prices. He projected a growth rate of 2.5% or even 3% for the year 2017.
The Central Bank of Australia has also estimated that the annual economic growth rate of Australia would increase to 3% for 2017 owing to the recovery in prices of commodities.
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