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Executive Summary

The report is about the economic growth of the country Australia. The economic background of Australia is going to be analyzed in this part to get details about economic ups and downs in the Australian Economy. Australia has always looked after developing its banking system strong in order to keep its economy unaffected from any kind of issues. It can be asserted that a firm law and regulation are needed to implement so that maximum positive economic performance of Australia can be reduced positively without compensating with productivity

1. Introduction

In this study, the chosen country is Australia to look after its economic growth. Australia has an economic score of 80.9 and it has made the economy to be the 5th Freest in the year 2019 (Index mundi, 2019). In the Asia-Pacific region, it has ranked 4th among 43 countries and it is going through structural change to conduct development in the economic part. The economic background of Australia is going to be analysed in this part to get details about economic ups and downs in the Australian Economy. The purpose of this study is to analyse the unemployment and Inflation rate in Australia. The aim of the study is to conduct discussion a detailed description of each of the five major components

2. Economic background of Australia

Australia's robust free-market democracy has helped in developing an effective system by developing several facilities. It is also said that Australia is one of the wealthiest nations and it has also enjoyed the economic expansion for more than two decades. Primarily Australia had faced several issues related to growth in the organisation along with low unemployment rate and also developing continuous growth (Heritage, 2019). After facing economic issues, it made changes in 2018 by developing their economy stronger. In the Australian Economy, service sectors have grown to be the largest part, which has a GDP of 70% and 75 per cent of the job.

Australia has always looked after developing its banking system strong in order to keep its economy unaffected from any kind of issues. Besides this, Australia is also significant due to its natural resources and energy stock. Australia is an open market that has minimal restrictions on the import of goods and services (Heritage, 2019). It is a process that has helped in opening up productivity in the market by conducting growth in the market. It also has looked after developing the market flexible and dynamic. It has also developed FTA with China and Korea along with Japan, Chile, Malaysia and New Zealand.

Figure 1: Trade freedom of Australia

In regulatory efficiency, it has also looked after developing the business in a transparent way so that business can be launched ineffective way. In the Open Market, the combined value of the exports and import is equal to 41.9 per cent of GDP (Heritage, 2019). It is also seen that the average applied tariff rate is 1.2 per cent. Government services also looked after developing the process of foreign investments so that domestic banks can be developed in a better way.

Figure 2: Tax burden of Australia

Foreign firms also compete with domestic banks so that a competitive financial system can be developed. In Australia, the top income tax rate is 45 per cent and it has a flat corporate tax rate of 30 per cent. Other taxes are value added and capital gains tax by developing the overall burden of 28 per cent of tax (Index mundi, 2019). From the growth report of Australia it is also seen that in the past three years, government spending amount has increased to the rate of 36.5 per cent.

Figure 3: GDP chart of Australia

GDP is stated as Gross Domestic Product that looks after developing an economic preference to the country's economy can be developed in an effective manner. It is also seen that from the year 1999 to 2008, the rate of Australia's GDP increased at a rate of 3.4 per cent (Index mundi, 2019). From the year 2010 to 2013, Australia's economic performance was developed to conduct growth in the average rate of 2.7 per cent. As compared to June 30, 2018, Australia had 322 non-tariff measures in force. It is also seen that in foreign investment, governmental policies do not interfere on that level.

3. Detailed Description of Five major economic components

3.1 GDP growth rate

The GDP growth rate is one of the important elements to measure the progressive growth rate of economic. It can be elucidated as the total value of goods generated and service offered within the country for one year. In order to measure GDP growth rate of a country, it is required to compare one-quarter of Country's GDP to the previous quarter. According to the report of World Bank, it has been identified that the GDP growth rate of Australia in 2017 is 1.95%, which is comparatively lower than 2012 that is 3.89% (Worldbank.org, 2019). It stated that the economic performance of Australia in 2017 is not good as compared to previous year performance.

Figure 1: the Growth rate of Australia

On the contrary, it has been evident that t8he highest GDP growth rate of Australia is 7.17% due to high flow economic. Through critical analysis of Australia' economic growth, it has been witnessed that several policies and regulations have been amended within organizations that reduce the progressive growth of economic. In arguing with this, the lowest GDP growth rate is observed in 1983 that is -2.22% that clearly asserted that economic growth rate of a country is not stable. Due to fluctuation of GDP growth rate, the sustainable growth of several companies and business is also declining gradually. Hence, it can be asserted that firm strategy is required to develop a firm strategy that creates opportunities for several industries such as automobile, servicing and manufacturing to enhance its productivity,

3.2 GDP per capita growth rate

GDP Per capita growth rate can be defined as output of countries economic with respect to total number of people. This element helps in measuring country’ standard of living that eventually help in determining whether economic rate of Australia is stable or not. According to the report of World Bank, it has been evident that the GDP per capita growth rate in 2017 is 1.977%, which is comparatively lower than previous year performance (Worldbank.org, 2019). By evaluating GDP per capita growth rate of Australia, the maximum rate was in 1973 that is 4.449%.

Figure 2: GDP per capita growth rate of Australia

The higher GDP per capita growth rate value implies higher sustainability of people based on fiscal and quality of living. Therefore, it can be asserted that a firm policy and regulation is required to amend positively to enhance the sustainability and reliability of people positively. On the contrary, it has evidence that the lowest GDP per capita growth rate is lowest in 2009 that is - 2.936% that implies that the utilization of natural resources, human capital and affirmation of law are not performed effectively that reduce the standard living of people in Australia. Through critical analysis of this aspect of economic, it can clearly say that a proper policy needs to amend within country that allows people to utilise present resources and technology to build better future positively. Hence, the current GDP per capita growth rate is not stable and satisfactory to achieve sustainable development.

3.3 Inflation rate

This aspect of economics is playing an important role in understanding different attributes of country both current as well as future. It can be elucidated as the rate of which pieces enhance with change in time that gradually reduce the purchasing value of capital. Through this element of economic, the sustainable growth of Australia can easily be determined in terms of national debt and supply of money (Worldbank.org, 2019). In 2017, the inflation rate was 1.949% which comparatively closer to previous year performance that signifies the continuity of economic stability.

Figure 3: Inflation rate of Australia

According to the report of the World Bank, the minimums inflation rate has been witnessed in 1997 that directly implies the efficient of policies and stability of governments in Australia. Through critical analysis of the inflation rate of Australia, it has been found that the maximum inflation rate is 15.47% in 1974 that clearly implies a high exchange of money positively. Through critical analysis of inflation rate in last 20 years, it can be asserted that the current policies and laws are satisfactory but require proper implementation of respective team to ensure that help in enhance economic and sustainable growth of Australia positively. One of the major reasons behind decline in inflation rate is due to exchange rate of capital that creates a negative effect on p economy of Australia. Hence, it is essential to require a firm program need to implement vigilantly such as a cashless payment that facilitates in upsurge economic performance of the country positively.

3.4 Unemployment rate

This aspect of economic plays an essential role in measuring potential risks and challenges that influence the successive growth of economic rate. The unemployment rate creates an adverse effect on successive growth of economy, which can be defined as percentage of unemployed worker in the total labour force. The unemployed rate of Australia in 2018 is 5.3.87%, which is comparatively slower than in 2015 that is 6.056% that implies that the availability of skilled and experienced labour is high that increase the sustainable rate of economic positively.

Figure 4 : Unemployment rate of Australia

On the contrary, it has been witnessed that the lowest value of unemployment rate is 4.23% in 2008 that signifies that there is a chance to reduce the rate of unemployment positively (Worldbank.org, 2019). The minimum value of unemployment rate supports many industries within Australia to enhance its productivity and sustainable growth of country positively. By evaluating unemployment rate of Australia from last 20 years, it can be asserted that a skilled and training program is required to amend that eventually help in increase progressive development of several industries and ultimately the economic performance of country for maximum result. Therefore, it can be asserted that the current economic performance can be maintained through training programmes.

3.5 Exchange rate

Exchange rate plays an important role in understanding broad perspectives of economic in Australia that eventually increase productivity and sustainable growth in a systematic manner. It can be defined as the value of one currency for purchasing and selling of product with another country that helps in increase sustainable growth of the country positively. According to the report of Reserve bank of Australia, it has been witnessed that the rate the exchange rate on 3 May 2019 is 0.69, which is comparatively lower than previous year performance that implies a progressive growth of country positively (Rba.gov.au, 2019).

Figure 5 : The exchange rate of Australia

On the contrary, it has been evident that the highest exchange rate was evident on 29 January 2018 that 0.809 that reduce the productivity and sustainability of Australia in terms of productivity and sustainability. In arguing with that, Reserve Bank of Australia asserted that the exchange rate of Australia is progressively declining that help in enhancing economic performance through increased productivity and reduce exchange rate positively. By comparing exchange rate in last 20 years, it can be asserted that a firm law and regulation are needed to implement so that maximum positive economic performance of Australia can be reduced positively without compensating with productivity. It has been witnessed that a foreign exchange contract is required to amend so that the exchange rate can be reduced systematically.

4. Recommendation

GDP growth is necessary for Australia to get details about economic performance. It also helps in conducting short term analysis to analyses the ups and downs of the economy in Australia. Thus, the Australian service sectors have also looked after developing the GDP to the rate of 68 per cent. The orientation of the market is also necessary to be developed in Australia to maintain economic balance. Besides this, in order to conduct increase employment rate to conduct development in economical part. Besides this, it is necessary to conduct development in GDP growth rate. It is also necessary to forecast the GDP growth of Australia to develop a better view of the economic part.

5. Conclusion

From the above study, it is seen that Australia has developed FTA with China and Korea along with Japan, Chile, Malaysia and New Zealand. It is also seen that from the year 1999 to 2008, the rate of Australia's GDP increased at a rate of 3.4 per cent. It is also seen that Australia has a top income tax rate is 45 per cent and it has a flat corporate tax rate of 30 per cent. A firm law and regulation is required to implement that monitor progressive growth of economic by reducing triggering potential risks.