Economy

Australia hold the world record for longest period of economic growth in the modern era. Between 1991 and 2019, Australia's economy experienced a period of growth unprecidented in the developed world.

Covid-19 latest information

This guide is an accurate reflection of the pre-Covid-19 business environment in Australia. Please note that due to the current situation, some circumstances may have changed in this country. Figures and data in the guide were last updated in May 2021.

Highlights

  • Australia’s economy has achieved growth without a recession between 1991 and 2019, the longest run of uninterrupted growth in the developed world.5
  • The inflation rate in Australia was 0.9% as of Q4 2020.3
  • After a challenging 2020, Australia's economy is projected to bounce back in 2021.6
GDP (Current USD)
USD1.3 trillion1
GDP Per Capita
USD55,925 per capita2
Real GDP Growth
3.1%3
Inflation Rate
0.9%3

Ranked

# 13

for technology readiness (in a survey of 63 countries by the IMD World Competitiveness Center)

Economic structure

Services (% of GDP) 73%1
Industry (% of GDP) 24%1
Agriculture (% of GDP) 3%1
  Exports Imports
Global ranking 214 244
Value $284 billion1 $209 billion1
% of GDP 24%2 29.7%2

Its serene-like growth has been a mix of good fortune and smart economic management. Resource-rich Australia, which has some of the world's largest reserves of fossil fuels, has benefited from China’s rapid industrialisation, especially its significant demand for steel over the past three decades. More than a quarter of all Australia’s exports now head to China.

Australia has also seen its population mushroom by 50% over the same period. And it is this influx of immigrants, of which many are highly skilled, that continues to support the economic miracle. Almost 28% of Australia’s population have been born overseas, the third highest of any nation globally, according to OECD data.

A rampant housing market is also fuelling economic growth. Even so, homeownership rates are high despite elevated prices.

And then there is China, which is showing signs of entering a slowdown of its own. This matters to Australia as it’s the most dependent on the Asian powerhouse of all OECD nations.

However, there is a new Australian economy emerging, too. One that is shifting its reliance from that of manufacturing and mining to one increasingly dominated by services. This new path could lead to economic growth for the next 25 years and beyond.

Regional economies

When it comes to financial rivalries in Australia, none is bigger than Sydney versus Melbourne. It is no surprise that both states where the two cities reside – New South Wales and Victoria, respectively – are regularly at the forefront of national economic performance.

New South Wales produces a third of Australia’s entire economic output with Victoria responsible for just under a quarter of the nation’s productivity. Melbourne is ranked 2nd most liveable city in the world in the Economist Intelligence Unit's 2018 Global Liveability Index, with Sydney ranking a more-than-respectable 10th.

Both Sydney and Melbourne have ever-growing populations of more than 4.5 million residents.  Melbourne is expected to overtake Sydney, currently the nation’s largest urban mass, in the population stakes as early as 2031, according to the Australian Bureau of Statistics (ABS).

Sydney is home to many high-end financial services groups, law firms and media companies. Melbourne houses some of Australia’s biggest corporations while also still possessing a sizeable manufacturing base.

Australia’s inland capital Canberra, which is home to the federal government, has a thriving public services and consulting sector.

Exports & imports

For a country of just under 25 million inhabitants, Australia punches well above its weight when it comes to trade. It is the world’s 16th largest exporter and 15th largest importer.

However, Australia relies on China like no other; almost 23% of its entire trade goes in either direction. Its Pacific trading routes also dominate. Just 9% of total trade is with the European Union.

Australia’s top five import markets:2

  1. China
  2. US
  3. Japan
  4. Germany
  5. Thailand

Australia’s top five export markets:2

  1. China
  2. Japan
  3. South Korea
  4. India
  5. United States

Primary products dominate the export list. Australia’s biggest exporting state was Western Australia, driven largely by iron ore. Coal from Queensland and New South Wales were also significant contributors.

Australia’s top five imports:2

  1. Refined Petroleum
  2. Cars
  3. Crude Petroleum
  4. Broadcasting Equipment
  5. Delivery Equipment

Australia’s top five exports:2

  1. Iron ore
  2. Coal
  3. Petroleum Gas
  4. Gold
  5. Aluminium Oxide

The country’s services sector – including professional services, education and tourism – also plays a significant role in the economy, now employing four out of every five Australians.

1 World Bank Group, 2021
2 Organisation for Economic Co-operation and Development, 2021
3 Trading Economics, 2021
4 World Trade Ogranization, 2021
5 Bloomberg, 2020
6 Deloitte, 2021