Analyse the recent trends in Australia’s major economic objectives. (Economic growth, inflation, unemployment, the exchange rate, environmental sustainability and distribution of income)
Economic growth -
Economic growth occurs when there is a sustained increase in a country’s productive capacity over time. This is generally measured by the percentage increase in real gross domestic problem. The target for economic growth set by the government is around 3-4%. Australia over the past 20 years has experienced non-inflationary growth at an average rate of 3.5% and has not experienced an economic downturn since 1990/91. This success is largely due to the significant microeconomic reforms in the 1980’s as well as the resources boom and high levels of consumer confidence have left the Australian economy in a strong position.
Levels of economic following the prolonged period of growth in 2007/08 were at 3.8%, levels of growth, this fell to 1.6% during the 2008/09 financial year as a result of the Global financial crisis and the subsequent decrease in exports, consumer spending and levels of investment. In 2009/10 this figure had risen to 2.1% primarily as a result of the continuing strong levels of growth in China through the GFC (6.2% shown in Diagram 2). 2011/12 saw level of economic growth rise strongly to 3.5%, a similar figure to that of pre GFC economic growth this came as a result of increased consumer spending, investment and the terms of trade for exports reached the highest level for 140 years in September 2011. This though did not last and in 2012/13 economic growth had fallen to 2.8% as a result of falling terms of trade and lower aggregate demand in the economy. Currently the level of economic growth in January 2014 is 2.3%, this figure represents a sub par performance.
Inflation is the sustained