ECONOMY MARKET ANALYSIS
The global economy
The global economy refers to the world’s economy or economy of all the countries in the world.
The Australian economy
The Australian economy is a developed and modern one, they use the Australian dollar (A$ or AUD) it is dominated by its services sector. Over the last two decades Australia’s economy has experienced encouraging results that have improved its economy and raised their standard of living. Australia is ranked one of the top developed countries in terms of sustained rates of growth. Experts predict that Australia is still going to grow. It is also ranked first in the Asia-Pacific region in labor, agriculture and industrial productivity per person employed. Australia’s economy is strong because they have growing ties with China, low inflation rate, a housing market increase and strong emphasis on reforms. High export prices on energy, agricultural produce and raw materials provide stable and growing foreign exchange. Mining also brings huge growth numbers. It has grown at a fast pace hence people call it the “envy of the world”
Australia’s Gross Domestic Product (GDP)
The gross domestic product is the main indicator used to determine the shape of a country’s economy. It represents the total dollar value of all goods and services produced over a specific time. GDP is expressed as a comparison to the previous quarter year. The Gross Domestic product in Australia expanded 0.70 percent in the fourth quarter of 2010. From 1959-2010 Australia’s average quarterly GDP growth was 0.88 percent. It reached an historical high of 4.50 percent in March 1976 and record low of -2.50 in June 1974. Australia’s economy is dominated by its services sector as we stated above, however its economic success is based on abundance in agricultural and mineral resources. Below is Australia’s GDP growth rate chart
Australia’s inflation rate
Inflation is a constant increase in the level of prices for goods and services in an economy. The measures of inflation are consumer price index (CPI) which measures consumer prices and the GDP deflator which measures inflation in the whole domestic economy. Australian inflation rose more than anticipated in the first quarter due to natural disasters and higher petrol prices. From 1937 to 2010 the average inflation rate in Australia was 6.02 percent. It recorded a low of -0.30 percent in September 1997. Below a chart showing Australia’s inflation rate between 1969 and 2007 for the overall inflation effect.
Australia’s interest rate
Interest rate is the rate which is charged or paid for the use of money. Australia’s interest rate decisions are made by the Reserve Bank of Australian Board, the interest rate is the cash rate. Cash rate is rate charged on overnight loans between financial mediators. From 1990- 2010, Australia’s average interest rate was 5.81 percent reaching an historical high of 17.50 percent in January of 1990 and a record low of 3.00 percent in April of 2009.
Australia’s financial market outlook
Experts say that growth in the world economy is slowing and so the global economic environment should provide a gentle background for Australian investors. They are anticipating growth of about three percent in this year.
Australia’s yield curve.
The yield curve reflects the term structure of interest rates. It is a graph that shows the relationship between yield and the term to maturity, at a given point in time. The yield curve below represents Australia’s growth.
Australia’s stock market prediction and analysis
Economics predict that stability will return to the world’s financial markets, global trade will start to expand again and the fear that has gripped investors over the last couple of years will subside. They believe the economy will continue to struggle but they do not expect the stocks to fall because it did not rise in 2010 and is still below the peak of 2007. They analyzed that a move away from the weak US dollar policy will mean that the Australian dollar is set to pull back. Further US dollar weakness may be the trigger for a change in market fundamentals near term, as this will hurt commodities prices and in turn the miners and stock market going forward.
RE: 79554555 ECONOMY MARKET ANALYSIS
2. ABCDiamond information-facts and figures-opinions on Australia. Retrieved from: www.abcdiamond.com/australia/inflation-in-australia/
3. The Australian Economy: 2010 in review and the outlook for 2011. Retrieved from finance.ninemsn.com.au