Economic growth in Australia over five years

The economy of Australia has been experiencing a positive growth. In particular, the economy of the nation has indicated extraordinary and remarkable progress devoid of going through a single recession for over two decades. This is a record that is unmatched by any other nation across the globe. The Australian economy has seen incessant growth and this has encompassed low unemployment rates, inflation that has been kept in check, considerably low public debt, and a financial system that is comprehensively strong and stable. For more than two decades, the economy of the nation has experience an average GDP growth rate of 3.5% every year. This growth rate has largely surpassed all other economies of major developed nations. For instance, the United States has an average growth rate of 2.6%, Canada having 2.5% and the United Kingdom having 2.2% (Tang, 2016). This can be illustrated in the diagram below.

Source: Trading Economics

Source: Focus Economics

This remarkable progress is owing to the fact that Australia was relatively not affected by the global financial crisis, taking into consideration that the financial and banking system of Australia continued to be strong and the rate of inflation under control. The greatest share of the Australian economy is represented by the services sector, which signifies roughly 70% of the gross domestic product (GDP) (Thedora, 2016). One of the elements contributing to the Australian economic growth encompasses the increase in demand for raw materials from emerging nations. This in turn has given rise to a considerable rise in global commodity prices, and has had a largely significant role in the changing aspects of the Australian economy. Accompanied by higher terms of trade, which sparkled a considerable rise in the purchasing power of family units, the upsurge in commodity prices instigated a thriving in mining investment, for the most part coal and iron (Focus Economics, 2016).

The economy of Australia is largely dominated by the service sector and it encompasses about 65 to 70% of the GDP. According to Tang (2016), the nation's financial services industry is presently the biggest supplier to Australia's production, creating approximately 9.4% of the total gross value added to the nation's gross domestic product. However, the recent economic growth and success is largely centered on the mining industry, which represent about 14% of the GDP and also the agricultural sector, which signifies 2% of the GDP, taking into account the nation is a key exporter of goods and commodities (Trading Economics, 2016). The other sectors that have contributed to the growth of the economy are the manufacturing and construction sectors. Investment in mining is one of the contributing factors that have steered the growth of the Australian economy in the past five years. A good example is the U.S.$40 billion investment Gorgon Liquid Natural Gas project. In particular, Australia has been significantly exporting natural resources, energy and food. What is more, the plentiful and varied natural resources within the nation have been drawing high levels of investment from foreign parties and encompass widespread renewable sources of energy (Focus Economy, 2016).

The Australian economy continues to be a lucrative and dynamic investment target, taking into consideration that just about all of its industries are open to overseas competition and also has a skilled labor force that is readily available. The Australian economy is projected to experience an average annual growth rate of 2.8% of its real gross domestic product (GDP) in the next five-year period between 2016 and 2021, which is the uppermost projection amongst advanced economies (Trading Economics, 2016).

References

Focus Economics. (2016). GDP in Australia. Retrieved from: https://www.focus-economics.com/country-indicator/australia/gdp

Tang, E. (2016). 2015 GDP growth rate of 2.5 per cent confirms the resilience of our economy. Australian Trade and Investment Commission. Retrieved from: http://www.austrade.gov.au/news/economic-analysis/2015-gdp-growth-rate-of-2-5-per-cent-confirms-the-resilience-of-our-economy

Thedora. (2016). Australia Economy 2016. Retrieved from: http://www.theodora.com/wfbcurrent/australia/australia_economy.html

Trading Economics. (2016). Australia GDP Growth Rate. Retrieved from: http://www.tradingeconomics.com/australia/gdp-growth