Australia Economic Forecast

Australia Economic Outlook

May 21, 2019

Australians defied pre-election opinion polls, and handed a surprise victory to the ruling center-right Liberal–National coalition. The coalition secured an absolute majority in the Lower House of Parliament, which will allow Prime Minister Scott Morrison to govern without the support of independents. Its emphasis on improving the economy and its stronger credentials in economic management likely tipped the scales in favor of the conservative coalition. Financial markets breathed a sigh of relief in response; the stock market surged to 11-year highs on Monday, while the AUD climbed on the same day. Elections come amid sluggish economic growth, defined by subdued consumer spending as highlighted by Q1’s weak retail sales. That said, exports were buoyant and wage growth picked up in the same quarter, while consumer sentiment gained some ground in April-May, and there are signs that the housing market may have left the worst behind.

Australia Economic Growth

While robust commodity exports will support the economy, falling real estate investment and weaker consumer spending will limit GDP growth this year. That said, the election outcome should boost investor confidence and could support fixed investment. Escalating global trade tensions and China’s economic slowdown represent the key downside risks to the outlook. Met the why particular panelists expect GDP to expand 2.2% in 2019, which is down 0.1 percentage points from last month’s forecast, and 2.6% in 2020.

Australia Economy Data

Population (million)23.323.724.024.424.8
GDP per capita (USD)64,99461,43351,34151,90355,690
GDP (USD bn)1,5161,4541,2331,2661,379
Economic Growth (GDP, annual variation in %)
Consumption (annual variation in %)-  -  -  -  -  
Investment (annual variation in %)-1.7-2.0-3.6-2.13.1
Exports (G&S, annual variation in %)
Imports (G&S, annual variation in %)-2.0-
Industrial Production (annual variation in %)
Retail Sales (annual variation in %)
Unemployment Rate5.
Fiscal Balance (% of GDP)-1.2-3.0-2.3-2.4-1.9
Public Debt (% of GDP)30.634.137.811.641.6
Money (annual variation in %)8.76.311.96.55.4
Inflation Rate (CPI, annual variation in %, eop)
Inflation Rate (CPI, annual variation in %)
Inflation (PPI, annual variation in %)
Policy Interest Rate (%)2.502.502.001.501.50
Stock Market (annual variation in %)14.80.7-
Exchange Rate (vs USD)0.890.820.730.720.78
Exchange Rate (vs USD, aop)0.970.900.750.740.77
Current Account (% of GDP)-3.2-3.2-4.8-3.1-2.5
Current Account Balance (USD bn)-48.5-46.7-59.0-39.2-34.0
Trade Balance (USD billion)20.311.9-

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Australia Facts

Bond Yield1.111.47 %Jun 13
Exchange Rate0.690.05 %Jun 13
Stock Market6,6190.08 %Jun 13

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