Economy of Australia - Overview

Overview

Australia's per-capita GDP is higher than that of the UK, Germany, and France in terms of purchasing power parity. Per Capita GDP (PPP) Australia is ranked fifth in the world (IMF 2011). The country was ranked second in the United Nations 2011 Human Development Index and sixth in The Economist worldwide quality-of-life index 2005. Australia's sovereign credit rating is "AAA", higher than the United States of America and Australia's four 'Big Banks' are among the 'World's 50 Safest Banks' as of April 2012. The four largest banks in Australia are also known as the "Big Four".

According to the 2011 Credit Suisse Global Wealth report, Australia has a median wealth of US$222,000 ($217,559), the highest in the world and nearly four times the amount of each US adult. The proportion of those with wealth above US$100,000 is the highest of any country – eight times the world average. Average wealth was $US397,000, the world's second-highest after Switzerland.

The emphasis on exporting commodities rather than manufactures has underpinned a significant increase in Australia's terms of trade during the rise in commodity prices since 2000. Australia's current account is about 2.6% of GDP negative: Australia has had persistently large current account deficits for more than 50 years.

Inflation has typically been 2–3% and the base interest rate 5–6%. The service sector of the economy, including tourism, education and financial services, constitutes 69% of GDP.

Rich in natural resources, Australia is a major exporter of agricultural products, particularly wheat and wool, minerals such as iron ore and gold, and energy in the forms of liquified natural gas and coal. Although agriculture and natural resources constitute only 3% and 5% of GDP, respectively, they contribute substantially to export performance. Australia's largest export markets are Japan, China, South Korea, India and the US.

In the past decade, one of the most significant sectoral trends in the economy has been the growth (in relative terms) of the mining sector (including petroleum). In terms of contribution to GDP, this sector grew from around 4.5% in 1993–94, to almost 8% in 2006–07.

The services sector has grown considerably, with property and business services in particular growing from 10% to 14.5% of GDP over the same period, making it the largest single component of GDP (in sectoral terms). This growth has largely been at the expense of the manufacturing sector, which in 2006–07 accounted for around 12% of GDP. A decade earlier, it was the largest sector in the economy, accounting for just over 15% of GDP.