Experts suggest that Australia’s 2015 economy will be at a critical stage. The country has been struggling consistently with the negative impact of a slowdown in mining development, declining commodity prices, and renewed fiscal restrictions. According to Goldman Sachs, Australia could be heading towards the perfect storm in 2015.
Statistics suggest that Sydney may be holding up the entire Australian economy once again, after contributing approximately 40% of the country’s growth during the last financial year. In 2013-2014, the economy of greater Sydney experienced an expansion of 4.3%, its fastest rate of growth in fourteen years according to a report on the economic performance of Australian cities.
For over three years, Western Australia has taken first place on CommSec’s ‘State of the States’ report. However, finally, an increase in the housing sector has allowed New South Wales to steal the top spot, rising from last to first in six years. It’s taken over a decade, but NSW is now officially the strongest state economy in Australia.
Statistics indicate that Australia’s economy is likely to remain significantly weaker for the rest of this year, and a chunk of the next. Commodity prices continue to slide back and forth and have offset some of the more positive news generated by the housing and consumer market. The institute-leading index for Westpac-Melbourne, generated to indicate the pace of economic growth over the coming 9 months, has contracted to 0.9%. The number was changed in August, from a previous reading of -0.75%.
If Australia’s property bubble bursts, the consequences would be disastrous for an economy dominated by oversized banks. But Government policies aimed at propping up the market are simply making the bubble bigger. And bigger.
Resources expert for the federal government, Quentin Grafton, has suggested that the iron ore price will continue its rapid decrease as the economy in China begins to show clear signs of unravelling, leading to serious problems for Australia. Speaking at a recent conference, Grafton announced that the price of iron ore was unlikely to see a quick recovery, which will result in a painful drop for Australia’s 2015 economy.
Economic experts expected the unemployment rates to stay at 6% or below this July, but instead they increase to 6.25%, allowing the United States to shine brighter for the first time since 2006. Though many business leaders in America believe its unemployment rate to be a sham because the federal agency does not count people who stopped looking for work and those that are underemployed.
The shale and oil revolution that has transformed U.S. and global energy markets is on its way to Australia. According to U.S. government report, resource-rich Australia could be home to as much as 10 times the existing known gas reserves, higher than its existing oil reserves.
Australia’s massive mineral exports allowed it to weather the global recession, which began in 2008, quite nicely.
A report by The Economist’s Intelligence Unit called the “Worldwide cost of living index 2013” has named two of Australia’s major cities in the top five most expensive cities in the world to live in. Sydney ranked third behind Japan’s Tokyo and Osaka, while Melbourne took fifth spot after the Norway’s capital, Oslo.
The index, which compares all cities with New York and US dollars revealed that the price of a loaf of bread skyrocketed in Sydney from $1.81 a decade ago to $3.48.
Australia’s central bank, the Reserve Bank of Australia (RBA), will invest up to 5 percent of its foreign currency assets in Chinese government bonds, announced its Deputy Governor Philip Lowe on Wednesday, marking a new milestone in the economic relationship between the two APEC countries.
