Australian growth is facing an undeniable slowdown, which is linked to the prolonged constraints on households as a result of rising prices and interest rates, as well as slowing demand from its Asian trading partners. Stubborn inflation is currently an obstacle to easing interest rates. On the other hand, the migratory influx is boosting a labour market which remains buoyant.
Despite its vast geographic territory, Australia is the world’s 13rd economy. Over the past decade, the country has been among the best performing OECD members. The country exports agricultural products on a large scale and has a strong financial sector.The economy was comparatively less impacted by the Covid-19 pandemic than other industrialised countries, as real GDP contracted by 2.4%. Nonetheless, Australia was impacted by the decline in world commodity prices during the pandemic particularly coal, iron ore and liquefied natural gas. A direct fiscal package, equivalent to 8% of GDP, has helped to mitigate the COVID-19 economic impact. It included wage subsidies, loan guarantees, increased healthcare expenditure and accelerated insolvency procedures. The country remains largely structured around commodity-related industries and will face a challenging task in rebalancing its activities away from these sectors, as environmental exigences increase.
