Domestic Growth
Understanding domestic growth in Australia
Australia is a capitalist nation, and its economy partly depends on the global markets. Therefore, there is a tendency that the Australian economy might suffer from global recession if there is. Despite this, Australia has found a way of surviving and has managed to stay recession-free for over two decades. Surprisingly, the nation is experiencing 20 years of sustained economic growth. This feat could only have been achieved through the government’s optimal use of the nation’s abundant raw materials, high prices of commodities, the boom in the mining sector, and high exportation activities. Through all these, the Australian economy has been able to secure its place among the best economies of the developed countries of the world. This is indeed unusual and remarkable because such a prolonged period of economic growth is very uncommon, even among rising economies, due to most countries experiencing negative growth or economic recession over that period of time.
The domestic growth of Australia has shown an upward trend over the last 20 years. One of the key indicators to measure Australia’s domestic growth or economic health is the Gross Domestic Product (GDP). GDP is a comprehensive measure of a country’s economic output, in this context, Australia. It quantifies the total market value of all goods and services produced within Australia in a given year.
Using GDP as a performance metric offers a significant advantage: it provides a comprehensive overview of the country’s economic activities. For instance, in 2019, Australia’s GDP grew by 1.84% from the previous year, indicating an increase in economic output, money supply, and productivity. On the other end of the spectrum, the lowest GDP growth rate that Australia recorded was 0.7% in the first quarter of 2009.
In addition to the nominal GDP, another essential economic indicator is the Real Gross Domestic Product (Real GDP). Unlike GDP, Real GDP accounts for changes in prices, such as inflation and deflation, providing a more accurate picture of a nation’s economic performance.
In recent years, Australia has capitalized on China’s emergence as a leading export market. The geographic proximity and extensive trade activities have substantially bolstered Australia’s domestic growth. Moreover, the flexible nature of Australia’s economy, characterized by its floating exchange rate, has been a major advantage in fostering its economic relationship with China, its key trading partner.
In the same vein, businesses in Australia have been aided by financial tools such as this business equipment finance calculator in their growth journey. This tool is designed to help businesses estimate the potential costs and returns of investing in new equipment by finding the latest equipment finance rates. Its use is widespread in sectors such as mining, manufacturing, construction, and agriculture, which often require large investments in machinery and equipment. By using this calculator, businesses can make informed decisions on their investments, which ultimately contributes to economic growth. Increased production and business expansion facilitated by these investments directly influence Australia’s GDP and Real GDP, further reinforcing domestic growth.
As we can see, numerous factors, ranging from international trade to the use of practical financial tools, have combined to propel Australia’s domestic growth over the past two decades.