Australia's 2015 Economic Outlook

Australia’s Economic Forecast

Spurred by robust business and consumer confidence, Australia’s economy is expected to grow even quicker in the next five years. 2011 to 2015 should see Australia’s GDP (PPP) grow by 4.81 to 5.09 percent annually. By the end of 2015, Australia’s GDP (PPP) is expected to be US$1.122 trillion.

Likewise, Australia’s GDP (PPP) per capita is expected to experience healthy growth. In 2010, Australia’s GDP (PPP) per capita was the tenth highest in the world – growing from US$38,633.17 in 2009 to US$39,692.06. In 2011, Australia’s GDP (PPP) per capita will increase by 3.52 percent to US$41,089.17. The following four years should see fairly consistent growth in Australia’s GDP (PPP) per capita, resulting in a GDP (PPP) per capita of US$47,445.58 by the end of 2015.

However, despite Australia’s strong economic growth, Australia’s unemployment rate has been relatively high. In 2010, Australia’s unemployment rate was 5.192 percent – 0.22 percent more than the world’s average of 4.97 percent.

In an interview given before the May 2011 budget, Australia’s Treasurer and Deputy Prime Minister, Wayne Swan, acknowledged that unemployment was unacceptably high in certain parts of Australia and the government was looking to create new incentives for more jobs. The May 2011 budget is expected to create 500,000 jobs in two years and is aimed at bringing unemployment rates down to 4.5 percent.

Whether this budget will prove successful in bringing down unemployment rates remains to be seen. According to the unemployment rate forecast provided by the IMF, unemployment is only expected to see a marginal decrease to 5.025 percent by the end of 2012. After which, the unemployment rate from 2013 to 2015 should remain constant at 4.8 percent.

Credit: Income Protection Insurance

In recent times, inflation rates have been another cause for concern. According to the Australian Bureau of Statistics, the increasing costs of food and fuel caused Australia’s inflation rate to be higher than expected in the first quarter of 2011. Yet, Australia’s inflation rate (average consumer price change) was still able to recover better from the financial crisis compared to most other advanced economies. In 2010, Australia’s inflation rate (average consumer price change was 2.962 percent, returning from 1.82 percent in 2009. Significantly, this was only marginally lower than the average inflation rate (average consumer price change) before the financial crisis from 1999 to 2008 (2.987 percent).

By the end of 2011, Australia’s inflation rate (average consumer price change) is expected to rise to 3.038 percent. However from 2013 onwards, Australia’s inflation rate (average consumer price change) is expected to fall below 3 percent once again and be between 2.65 percent and 2.498 percent from 2013 to 2015.

Australia’s current account balance has remained in negative figures for more than fifty years – caused by a narrow export base as well as high levels of capital goods from overseas. In 2010, Australia had one of the top ten highest current account balance deficit in the world at US$29.928 billion. The Australian current account balance deficit is expected to rise even further in the next five years, reaching US$89.106 billion in 2015.

Find out more about Australia's Economic Forecast on Economywatch.com

Read more about Australia's economy, including industry information and trade statistics on EconomyWatch below.