Investor Update: December 2011 International Data Comparisons (IDC)

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December 2011 International Data Comparisons (IDC)

23 December 2011

Download Austrade's 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 December 2011.

Points of interest include:

Australia advanced one spot in the Legatum Institute's 2011 Prosperity Index to third place out of 110 countries, behind Norway and Denmark. Australia achieved top 10 rankings in the following sub-indices: education (1st); personal freedom (4th); social capital (4th); governance (6th); economy (7th); and entrepreneurship and opportunity (7th).
Australia's is ranked fifth in the World Economic Forum's Financial Development Index. The country's high ranking can be attributed to its continued strength in financial intermediation. Australia achieved solid scores in banking (7th); nonbanking financial services (8th) and financial markets (9th). Australia ranked second in overall financial access due to its strong performance in the sub-indices of retail access to capital (1st) and commercial access to capital (14th).
On 7 December 2011, the Reserve Bank of Australia (RBA) cut its benchmark interest rate to 4.25 per cent, down one quarter of a percentage point for a second consecutive month. The cut reflects the Bank's concern that euro-area turmoil is dimming prospects for the global economy. In its statement, the Bank said: "Financial markets have experienced considerable turbulence, and financing conditions have become much more difficult, especially in Europe. This, together with precautionary behaviour by firms and households, means that the likelihood of a further material slowing in global growth has increased."
Underpinned by a surge in business investment and solid growth in consumption, Australia's real GDP rose 1 per cent in the September 2011 quarter to be 2.5 per cent higher through the year. The Treasurer, the Hon Wayne Swan said: “The strongest driver of quarterly growth was business investment, with the unprecedented investment pipeline powering ahead at a rapid pace.” New machinery and equipment investment rose 6.7 per cent to be 19.3 per cent higher over the year. New engineering construction surged by 31 per cent in the quarter to be over 50 per cent higher through the year. Household consumption also continued to grow solidly, rising 1.2 per cent in the quarter and 3.8 per cent through the year.
Australia's economic performance since the global financial crisis has been "enviable", according to the International Monetary Fund (IMF) latest annual assessment. The IMF said: "it was one of the few advanced economies to avoid falling into recession – a reflection of its strong position at the start of the crisis, a supportive macro policy response, a healthy banking system, and a flexible exchange rate, as well as robust demand from Asia…Extraordinarily strong demand for Australian coal and iron, particularly from China's steel mills, has pushed the country's terms of trade to a 60-year high." The IMF expected Australia's real GDP growth to accelerate to around 3.3 per cent next year after slowing to 1.8 per cent in 2011.
Australia's headline Consumer Price Index (CPI) rose by 0.6 per cent in the September 2011 quarter; seeing the annual rate of price growth slow to 3.5 per cent. The trimmed mean and weighted median measure showed that inflation rose by just 0.3 per cent in the third quarter. This saw a slowing especially in the annual trimmed mean measure to 2.3 per cent per cent year on year from 2.6 per cent in the second quarter. This implies that the annual rate of inflation according to this measure is now in the RBA's target band of 2 to 3 per cent.
Australia's unemployment rate grew slightly to 5.3 per cent in November 2011 from 5.2 per cent in October. Full time jobs fell by 39,900, which was partly offset by a rise in part-time employment (33,600 jobs). Despite this slight increase, Australia's unemployment rate remains low, especially compared to the high rates of unemployment in many advanced economies, such as the Euro region (10.3 per cent), France (9.3 per cent), USA (8.6 per cent), UK (8.3 per cent) and Canada (7.4 per cent).
Australia's total trade with China in FY2010-11 was A$113 billion, up 26 per cent from the previous year. China was Australia's largest two-way trading partner, our largest export market (A$71 billion) and source of imports (A$43 billion). India has also emerged as a significant market, with total value of A$21 billion and a market share of 3.7 per cent. Japan remains Australia's second largest trading partner, with a total two-way trade value of A$68 billion and a market share of 11.8 per cent. The USA also remains a significant trading partner with total two-way trade of A$48 billion.