Australian economic overview

In recent years Australia's economic performance has made it one of the outstanding economies of the world. Effective economic management and ongoing structural reform has helped to generate high levels of growth, low inflation and low interest rates.

Australian economy

Australia boasts an efficient government sector, a flexible labour market and a very competitive business sector.

Australia has an open economy with a business-friendly tax system and low barriers to trade and investment. The labour market is skilled and flexible, with robust economic growth and moderate wage and price pressures supporting sustained employment growth. Australia's open economy is an excellent climate for enterprise and innovation.

Australia's economic activity is largely focused on the eastern seaboard, where the concentration of population is highest. In terms of contribution to gross domestic product (GDP), Australia's key states/territories are New South Wales, Victoria and Queensland. Western Australia is also a significant contributor off the back of its strong mining industry.

Australia's GDP growth is forecast at around 3 per cent for both 2007 and 2008, with private consumption growth remaining strong, as will exports of minerals.

Key industry sectors

As in the majority of developed countries, the services sector generates the bulk of Australia's GDP. While the largest service industry is the finance, property and business services sector, it is the agricultural and mining sectors that account for the majority of Australia's goods and services exports. To this end, Australia's comparative advantage in primary products is a reflection of the natural wealth of the Australian continent.

Other major services industries include retail and wholesale trade, transport and communications, and construction. The most rapidly growing service industry over the past five years has been communications. Information and Communication Technology (ICT) is one of the key industries driving Australia's economic growth, and Australia's ICT spending as a proportion of GDP is the tenth-highest in the world.

Tourism is another of Australia's most important industries, with more than 90 per cent of tourism-related businesses employing around 20 staff. With almost half of every tourism dollar spent outside of the main cities, tourism is also a key economic sector for regional Australia.