Australia: a Resilient Economy

by Nerella Campigotto

 

If international expansion is on your agenda, this is a great time for seriously considering Australia as a potential business destination. Australia is the only developed economy in the world to avoid the recession and record positive growth in 2009, and according to the IMF, is anticipated to show lower net debt than any other advanced economy through 2014.

 

In October 2009 Australia was the first in the Group of 20 to raise interest rates (and did so again in November and December taking it to 3.75%) prompted by a decrease in unemployment, and increases in the stock markets, house prices, business investments and retail sales. GDP is expected to grow above 3% in 2010.

 

At time of writing unemployment sits at 5.7% and is expected to decrease further next year. Close to 100,000 jobs were added in the three months to November 30. The two-year government bond yields 4.48% and the Australian dollar trades at around US$0.91.

 

A diversified export market has also contributed to the economy’s health. Australia’s five top trading partners – Japan, China, South Korea, India and the US – represent 57% of the country’s total export market. Continued strong demand for its resources, such as iron ore and liquefied natural gas, will sustain Australia’s economic stability. Services exports have had an average growth rate of 7.8% per annum over the past five years.

 

Some additional 2009 rankings that indicate a strong economy:

·         The World Economic Forum rates Australia as the second-best financial centre in the world after the UK.

·         D&B’s Global Risk Indicator places Australia as one of the world’s four safest countries in which to invest.

·         The World Bank ranks Australia 7^th among OECD countries for ease of doing business.

·         The IBM Global Locations Trend Report places Australia 6^th in the world for R&D jobs. It is also considered to have the most competitive IT industry in the Asia-Pacific region.

·         According to the Mercer Global Pension Index Australia has the second-best retirement system in the world, behind the Netherlands.

·         The Global Competitive Index ranks Australia 15^th overall out of 130 countries, and 4^th for its banking system.

·         In 2009 the UN has placed Australia second in the world for quality of life, behind Norway.

 

Australia’s growth rate is anticipated to continue for a few more years, underpinned by booming resources investment, rising household income and the strength of its major Asian trading partners. All in all, this is a great time to make this vibrant economy part of your international market entry strategy.