Potential Problems for the Australian Economy
Australia is a developed country and has done reasonably well over the last two decades or so. Even during the global financial crisis, Australia suffered a smaller economic impact of the global economic events as compared to many of the other nations all over the world. It has a developed infrastructure, a developed economy and another major aspect that is holding the Australian economy well above water is its large trade especially its raw material exports to countries like China. But over the last few months or so there are some problems that are beginning to show in the Australian economy that are a cause of concern. The following are details regarding some problems that the Australian economies are facing in 2015:
Potential Problems Faced by the Australian Economy
• Chinese economy has had a dream run for decades when it comes to growth. Its growth is now slowing down. Australia has been a top raw materials supplier for the Chinese industries over the years. As China slows down, raw material demand slows down in Australia which is bad news for the Australian economy which depends largely on these exports.
• Weak global demand and fall in commodity prices has been a factor affecting the Australian economy in 2015. The service sector in Australia which contributes to a large part of the economy is also not giving out strong number in 2015.
• Unemployment is a major problem faced by many economies around the world. In 2015, unemployment is a serious problem in Australia as well. The unemployment has surged higher than it has for more than a decade which is a serious concern for Australia at the moment.
• The economy of Australia has slowed down over the last year or two. The GDP growth rate has dropped considerably and as the Chinese growth slows down, Australian growth rate is likely to slow down simultaneously.
• As the United States Dollar strengthens against the currencies of the world, it has also strengthened against the Australian dollar over the last few years. This is also a weakness in the Australian economy that needs to be tackled.
The Australian economy is highly dependent on foreign trade, especially with countries like China. The impact of global weak demand and slowing down of the Chinese economy is bound to have its effects on the Australian economy. Tackling the economic problems before they go out of hand is the key to revival of the Australian economy.