How Does Globalization Affect Australian Economy

Australia has a long history of large and persistent current account deficits. During the 1960s the current account deficit averaged the equivalent of 2 per cent of gross domestic product. The CAD rose considerably, due to the floating of the Australian dollar and the opening of the capital account in 1980s, and by 1990s CAD has sustained around an average of about 4.5 per cent of GDP. However, in recent years the deficit has been falling and in 2011 it was just 2.25 per cent.

This has been the result of inflationary pressures due to excessive consumer demand, and a world increase in oil prices, the RBA’s primary objective is to contain inflation at 2-3% whilst also achieving sustainable growth. The current increases in interest rates will result in lower aggregate demand as consumers have less disposable income. This results in reductions in inflationary expectations, and a decrease in the demand for imports. Furthermore higher rates of interest will encourage overseas investment into Australia, thus resulting in an increase in the demand for the Australian dollar. An increase in the demand for the AU$, and a decrease in its supply due to less import expenditure will result in an appreciation of the AU$ in forex markets. Overall this results in depressed economic activity and lower levels of growth. However the RBA has been able to increase interest rates in order to contain inflation while maintaining economic growth. This is because the global economy has continued to grow at record pace, with strong growth in the US and China, and the recovery of Japan and Europe. Consequently demand for Australian exports has remained high, thus creating opportunities for increased production and subsequent economic

Australia mostly imports products such as vehicles, machinery, oil, electrical components, pharmaceuticals, medical apparatus, gems and precious stones, plastics and furniture respectively because these products are cheaper to import than to produce domestically due to the high labour costs. Australia’s top 10 imports account for 64.7% of the nation’s total imports. Australia mainly exports crude oil and minerals in raw form because they do not have refineries and smelting plants mainly due to environmental issues. As a result, these go out in raw form and are imported as finish products. This is because natural resources are in great abundance in Australia. Products such as gold, coal and steel are exported to different countries so that they can use them in the manufacturing of certain products, which are then imported to Australia as finished products. Australia’s top 10 exports account for 77.7% of the nation’s total

› Independent economic modelling estimates that Australia’s free trade agreements with China, Japan and South Korea alone may create some 7,900 jobs in 2016 and over 14,500 jobs by 2020. › 1 in 5 jobs in the Australian economy involve trade-related activities. 3. Trade makes products cheaper for Australian households and businesses › Real prices for consumer products such as clothing, footwear, motor vehicles, household

Secondly, trade makes products cheaper for Australian households and businesses. Prices for consumer products such as footwear, household appliances, clothing, motor vehicles and audio-visual equipment

A recent study (Department of foreign affair and trade, 2014, p.4.) shows that almost half of Australia’s exports came from minerals and fuels with 49.3% in 2013, especially iron and coal. Followed by service exports 17.3 percent and manufacturing exports 12.9 percent. In 2013, two-way trade grew by 3.7% to $647.4 billion. Comprising imports totaling $328.8 billion and exports $318.6 billion. Travel Service and petroleum made up 20.6 % of total imports in 2013. Australia’s top three imports in 2013 were personal travel excluding education services ($24.7 billion), crude petroleum ($20.2 billion) and passenger motor vehicles

The economy in Australia runs through the economic cycle involves in the cycle of boom and recession in a business. In an economic boom, businesses make profits by increasing the prices of their products by the consumers who are willing to spend their personal disposable income. Although, there are disadvantages during an economic cycle when it comes to recessions in the economy. Recessions can make businesses not earn profits out of its sales because consumers didn’t have the confidence to spend their money. Employees need money in order to save but the business isn’t making a profit so they have to cut down some employees because they don’t have enough money to pay all of their employees. Economic influence is an external influence because

In short, over the last half century Australia's exports have shifted from predominantly agricultural products to minerals, while its trade partners have shifted from Europe to Asia. The U.S. remains Australia's largest source of imports and (after Japan) its second largest export customer. Those shifts in trade patterns have been accompanied by shifts in immigration.

The overall trends shows that Australian economy is in moderate level, but the GDP annual growth is below expectation. In addition, recently Australia are facing two important issue, which are increasing budget deficit and aging population. If the government does not give the efficient policy for solving this problem, it can affect to decline in Australian economic performance.

The overall trends shows that Australian economy is in moderate level, but the GDP annual growth is below expectation. In addition, recently Australia are facing two important issue, which are increasing budget deficit and aging population. If the government does not give the efficient policy for solving this problem, it can affect to decline in Australian economic performance.

Australia has always leaned heavily on China as a key trade partner China being the fastest growing nation creating the need for raw materials. A key investor Australia remaining as Chinas preferred investment Candidate. As well as a labour market offering cheap labour to Australian businesses, large commodities buyer and limited taxation and an average of 50% cheaper materials. Creating a heavy reliance on China showing that ultimately Australian businesses would not be able to survive leading to catastrophic events such as recession.

Australia’s GDP rates stands at 1453.77(B) experiencing the weakest GDP growth since 2013. Although there was increase by 0.2 percent in the second quarter of 2015 the positive contributions from final consumption expenditures and investments failed to offset the decline in net exports. This led Australia to growth constraints mainly driven by a sharp fall in global prices of some export commodities. Comparatively, Australia were not affected by the global financial crisis and the banking system remained resilient rather. In addition, to Australia’s household spending rose by 0.5% and this helped in boosting growth and even accounting for 55.8% of its GDP, (World Bank, 2014 and BBC, 2015). This may impose

Over the past years, Australia has gone through many changes associated with their economy. In 1996, Australia was in a period of recession, but began to have economic growth in the years of 1997 through to the early 2000s. This growth of the economy was due to the weakening of the Australian dollar, which caused an increase in market shares in Australian exports. Because of the decrease in prices of Australian exports

Australia is more dependent on export to china which will also having a trouble in terms of decline in chines economy.

As a result of this economic drive, an influence was evident on the spatial economic makeup of Sydney. The unemployment ‘map’ of the city was distributed into two opposing fragments, illustrative of contemporaneous social geography. The highest rates of unemployment were marked in the western and south-western suburbs, while the lowest rates occupied the northern suburbs. In place of this, the service sector, specifically finance, business, retail, community service, professional, and wholesale, sprouted. However, this was not sufficient to counterbalance the unemployment rates. In 1996, the services industry comprised a large 40% of employment, a step up from just 24% in 1971 (Fagan & Webber 1999), of which was concentrating in the inner city and neighbouring regions (Forster 2006). In observation of these dynamics, the extent to which the urban layout of progressive producer services and the additional locations of corporate headquarters have been altered by the forces of globalisation is evident.