The economy of Australia is considered to be one of the biggest economies in the world. Aside from being powered by natural resources, the economy of Australia is also fueled by inward migration. For the past decades, the economy of Australia has experienced significant success, indicating a firm structural reform, strong economic policies, and commodity upsurge. However, while the GDP figures of Australia clearly shows that the overall economy is improving, businesses and households are yet to feel the benefits.
In order to give you more information about this, below is a short overview of the country’s economic status in the past, as well as the predictions of experts on its seemingly sluggish economy.
Australia’s economic status in the last five years
According to analysts, the economy of Australia has not gone backward for the past five years, but at the same time, it also didn’t experience any surges. Since 2012, the average annual GDP was merely 2.5% and if we are to equate this value, it usually means that the economy has recently gone through a recession.
- Analysts believe that one major reason for this average growth was the end of the mining boom where the collapse of mining investments overwhelmed Australia’s economic growth.
- And while there are new business investments coming up, Australian households, in general, remain to be stuck in the bleak and low economic growth. Households became too hesitant to spend, leading to an annual contribution of just 1.3% points.
What’s in store for Australia in 2018?
Experts strongly think that Australia’s seemingly stagnant economy is quite inevitable, given the intense cost of living and everyday pressures that Australians are experiencing on their household budget. They also think that this pressure will remain in spite of the best possible efforts to increase the compensation of employees. As a percentage of 0.9% remains below inflation, the amount of compensation for every employee is expected to stay where it currently is–a point even lower than it was in 2010.
- Aside from that, the average household disposable income failed miserably last year, making it the lowest level of income households for the past 6 years.
- In the past year, real household disposable income fell 1.9%, and it also means that the level of income households have at their disposal is lower than it was five years ago.
- On top of all these, economic experts still believe that all the aforementioned facts are not that surprising. After all, it is not always easy to create solid investments and income that will tick up wages–more often than not, it takes several years of effort.
On the good side, there are still some who believe that Australia can still improve the current status of its economy by focusing on three major key themes: commodities cycle, global growth, and inflation. Nonetheless, let us be positive and hope that the economy gets better and that Australian households catch up.