Commonwealth of Australia is the only country on earth that governs an entire continent. Compared to G7 nations, Australia’s overall economy is comparatively small. According to the planet Bank, however, on a per-person basis, its GDP is even above the U.K., Germany and even the U.S.
In the past fifteen years approximately, Australia’s economy has grown a mean of three 0.6% annually. In 2011, Australia ranked third overall in the Legatum Institute’s Prosperity Index.
Australia’s economy is very service oriented, with over 70% of its GDP coming from industries like finance, education, and tourism.
Despite having a really robust export industry and stellar growth, Australia has been notoriously famous for consistently having a high accounting deficit. This means that Australia is consumption more resources from other economies to satisfy its own domestic consumption.
The Federal Reserve Bank of Australia (RBA) is that the main administration of Australia when it involves monetary policy. The RBA’s aim is three-fold:
- Keep exchange rates stable
- Ensure growth
- Maintain full employment
In order to try to this, the bank believes that the country’s annual rate of inflation must be kept within 2-3%. By keeping a decent rein on inflation, the worth of their domestic currency is secured, which can eventually cause sustainable economic process .
One important characteristic of the AUD is that it’s a high direct correlation with gold prices. The reason behind this is often that Australia is that the third biggest gold producer within the world. As a result, whenever the worth of gold rises or falls, the AUD goes along for the ride.
Among the main currencies, the AUD has been known for having a high rate of interest. This makes it a favorite for carry trade. Carry trade referred to as the practice of shopping for a currency with a high rate of interest in exchange for a currency with a lower rate of interest .
The AUD is greatly suffering from macroeconomic factors like monetary policy rhetoric, interest rates and domestic economic data.
Important Economic Indicators for Australia are:
- Consumer Price Index
- Balance of Trade
- Gross domestic product
- Unemployment rate