International: Economics and Australia

Topics: Economics, Economy of Australia, Economy Pages: 12 (3601 words) Published: March 25, 2013
A PESTEL analysis of the Australian market
Australia is the 15th richest nation in per capita terms and is the 6th oldest continuously functioning democracy in the world. Australia has the 14th biggest overall economy in the world and the 9th biggest economy. Australia’s economy is open and innovative. Over the past decade solid productivity gains have been accompanied by low inflation and interest rates.Also Australia has low barrieirs to trade and investment .Australia foreign and trade policies promote the security and long term prosperity of Australia in a global context. Australia’s economy is highly susceptible to the impact of climate change. In 2008 the Australian Government committed to create an organization called “Infrastructure Australia” to provide a new national approach to planning ,implementing and funding the nations future. Being a safe, stable and prosperous country Australia is an increasingly attractive hub for international and regional business and business operations. According to recent survey it can be said that Australia’s economic success in the last century was based on its abundant agricultural, mineral and fuels resources.Numerous factors have contributed to this development Informations and communications technology is a key driver in economic growth,other factors such as advances in travel,exchanging of ideas,broader accces to standards to educations etc have also contributed to this success. Australia’s ICT market is worth an estimated $89 billion with more almost 25,000 companies employing 236000 IT specialists Political environment

In Australia, it is a liberal-capitalistic democracy. The state keeps interfering substantially in the economy through the use of various roles; for instance the parliament might decide to set up importation taxes aimed to protect the national economy, or it might create environmental protection laws aimed to protect the natural heritage of the country. This affects international business because when taxes keep varying and increasing especially there will be an impact on the economy which in turn will affect the exchange rates and currency rate. Also according to the present situation as mentioned in The Australian Financial Review 2010: there is fear that the hung parliament will negatively affect the economy. Australia's rate of economic growth slowed down between July and September as the high value of the Australian dollar dug into export earnings. The country's gross domestic product rose just 0.2% during the third quarter period, down from growth of 1.1% between April and June. Analysts deduced that Australian consumers were also hit by higher interest rates. However, the Australian economy is set to continue to grow, led by demand from China for its raw materials. According to Michael Blythe, chief economist at the Commonwealth Bank, the latest economic growth figure was a “disappointing outcome .Since Australia is helped by its vast exports of iron ore and other raw materials, it has avoided recession for 19 years. One of the country's largest iron ore producers is the Anglo-Australian group Rio Tinto, which is increasing production, has announced $7.2bn in new investment in the region since July 2010. According to surveys Australia's economy continued to gather pace in March as world demand for commodities boosted the nation's coffers. However due to recent uncertainty from the European debt crisis could lower expectations of economic growth in the future. Economic Environment

Australia is an island continent in the Southern Hemisphere, lying between Antarctica and Asia. It is surrounded by the Indian Ocean to the west; the Timor, Arafura, and Coral Seas to the north; the Pacific Ocean to the east; and the Tasman Sea and Southern Ocean to the south. In other words its placement is a added advantage to business because when it comes to export and import, Australia is like a commuting place. Much of the continent is low, flat, and dry. The area of...
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