November 2010 International Data Comparison (IDC) 19 November 2010 Download Austrade’s November 2010 International Data Comparisons (IDC). It is an easy-to-read comparison of Australia’s performance and position across key economic and financial related indicators. The IDC has been updated to include data effective to 15 November 2010. Points of interest include: - According to the IMF’s 2010 Article IV Consultation on Australia, released October 28, the Fund reported that Australian economic outlook is favourable. The Australian economy will likely grow by 3.0 per cent in 2010 and 3.5 per cent in 2011, with private investment in mining and commodity exports taking over from public demand as the main driver of growth. The IMF commented: “The terms of trade is expected to rise to historic highs in late 2010, driving a mining boom that is likely to be long lasting, given increasing ties with fast-growing emerging Asia. The current account deficit is projected to narrow in the near-term to less than 2½ per cent of GDP, due to the jump in the terms of trade.”
- Australia’s inflation has moderated over the past two years. In underlying terms, inflation has returned to the RBA’s medium-term target band of the 2-3 per cent. In the September quarter, the CPI increased by 0.7 per cent, to be 2.8 per cent higher over the year. This outcome was slightly lower than expected, partly reflecting movements in the prices of some volatile items. The RBA noted in its November Statement on Monetary Policy that Australia’s underlying inflation is expected to remain at around 2.5 per cent until middle of 2011, before gradually rising to 3 per cent by the end of 2012.
- Australia’s unemployment rate unexpectedly rose to 5.4 per cent in October from 5.1 per cent in September as the participation rate, which measures the workforce as a percentage of the population over 15 years old, climbed to 65.9 per cent from 65.6 per cent. Overall, the number of people employed increased by 29,700 from September. Full-time jobs declined by 14,100 in October and part-time employment rose by 43,800. The Australian labour market has remained healthy, with around 375,000 jobs created over the past 12 months.
- On November 2, the RBA decided to increase the cash rate target by 25 basis points to 4.75 per cent (effective 3 November 2010) – the first increase since May 2010. The RBA Governor justified the rate increase by looking ahead at a build of inflationary pressure due to the mining boom – identifying high terms of trade, reduced spare capacity in the economy and faster international economic growth as reasons for the unexpected decision. The RBA noted: “Looking ahead, notwithstanding recent good results on inflation, the risk of inflation rising again over the medium term remains. At today’s meeting, the board concluded that the balance of risks had shifted to the point where an early, modest tightening of monetary policy was prudent.”
- International Trade in Goods and Services for September 2010, released November 4 by the Australian Bureau of Statistics, showed a trade surplus of A$1.8 billion (current prices, seasonally adjusted) in September, following a revised surplus of A$2.4 billion in August. Trade Minister Dr Craig Emerson said that this was Australia’s “sixth consecutive monthly trade surplus – and only the fourth time in 40 years Australia has had six or more surpluses in a row.” Overall, exports of goods and services fell 1.5 per cent to A$24.2 billion, while imports rose by 1.4 per cent to A$22.4 billion.
- Australia is now ranked 5th highest in the World Economic Forum’s Financial Development Index. Australia's high ranking is mainly attributable to continued strength in financial intermediation. Australia achieves solid scores in financial markets (6th), banking (7th) and nonbanking (8th) financial services. Australia’s top performance in retail access to capital (1st) is accompanied by a high level of commercial access to capital (11th), enabling the country to achieve the greatest level of overall financial access (1st) in the sub-Index.
- Australia advanced one spot in the Legatum Institute’s 2010 Prosperity Index to fourth place in the world out of 110 countries, behind Norway, Denmark and Finland. Countries were rated on the following: economy, entrepreneurship and opportunity, governance, education, health, personal freedom, safety and security, and social capital. Australia achieved the following top ten rankings: education (2nd), personal freedom (4th), social capital (4th), economy (8th) and governance (8th)
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