Australia is a formidable country with its strong economy. The Australia economy has been growing at its best and fastest in 4 years. The economy has increased by 3.3% over the year to June, which matches the forecasts and putting the GDP growth slightly above satisfactory levels. It has already notched up 100 quarters without recession.
It almost broke the Netherlands’ record for longest expansion at 103. The optimistic results are impressive but economic analysts say that the Australian economy is not very enduring. The country could enter recession as it transitions from the mining boom.
Australian Employment is Slowly Gaining Momentum
The national unemployment rate is currently at 5.7%. Western Australia’s jobless rate is at 6.3%, and South Australia is at 6.4%
“Some people are doing better, some people are doing worse but in aggregate, basically the economy is in very, very good shape. The job market has softened in some states like Western Australia, but from very low levels of unemployment in relative terms.”” Mr James said.
Is Western Australia About to Enter Recession?
Australia’s economic state is sustained and growing in national levels, yet analysts say that Western Australia is in recession when domestic demand plummeted by 2.5%. James mentioned that a large portion of the Australian population has yet to experience recession, which gives the impression that Australia’s economy is bullet-proof.
“Recessions are just those times that you just don’t want to see. It’s where unemployment can go from 5 per cent to 10 per cent, in the space of a couple of quarters, people lose their jobs and businesses fail,” Mr James said.
Another concern is that the government building investment gave the GDP a huge bump. It added 0.7% points to the GDP. Bill Mitchell, professor of economics at the University of Newcastle, says that it might suggest that the only factor keeping the economy stable is through public spending.
“The private investment is in a state of collapse, our external sector, our export sector is basically went backwards this quarter, and the only thing that kept growth above zero was the public sector,” Professor Mitchell said.
Majority of Australia is Still Doing Well
Australia weathered the global financial crisis relatively unscathed. The last recession ended in June 1991. The last 25 years was an age of resiliency for the Australian economy. The next challenge to sustain the growth and flourishing forward would be incoming Reserve Bank Governor Phillip Lowe to consistently keep up performance levels into the future.
“We’ve got a very well balanced economy and if any credit has to go it has to go to the Reserve Bank for ensuring that our economy has managed to chalk up 25 consecutive years of economic growth,” Mr James said.