If you are contemplating work in Australia, you must be interested in learning more about the present economic and employment situation in the country. Let’s check out the economic and employment scene in Australia in 2021 and beyond.
Australia is the world’s 13th largest economy in the world. Australia’s GDP growth in 2020 was –4.2%. This was a 6% decrease from 2019.
Australia’s economy is driven by government spending and business. The consumer sector struggles with low-wage growth in Australia. Another area from which the country benefits is the export of agricultural products on a large scale. There’s also a financial sector in the country that exhibits great vigor.
IMF forecasted a 3% growth for the country in 2021. In 2022, Australia is expected to grow by 2.8%. These forecasts are subject to the global economic recovery after the COVID-19 pandemic ends.
Nevertheless, there are challenges to the recovery in business and consumer sentiment. This presents in the form of business insolvencies and weakness in the labor market due to scaling back of policy support in 2021.
The economic recovery in Australia has been uneven. This was mainly due to the differences in the impact of restrictions across regions. These restrictions were applied to firms and industries. Prolonged international border restrictions also affected the recovery in the sectors of education and tourism.
In January 2021, IMF revised Australia’s GDP growth projections for 2021 to 3.5% and 2.9% in 2022.
Australia’s inflation rate was around 0.7% in 2020. This is expected to lower to 1.3% in 2021 and rise again to 1.5% in 2022.
In 2020, Australia’s government budget balance had a large deficit of –9.2% of GDP. It’s expected that this will fall to –9.8% in 2021. A process of recovery is expected in 2022 with the deficit touching –5.9% in 2022. In 2020, IMF evaluated the government debt at 60.4% of GDP. This is expected to become 70.2% in 2021 and 74.4% in 2022.
The government is attempting to better the situation by offering tax breaks, infrastructure spending, and social transfers. The monetary policy is also accommodating as yet.
Investment is also expected to get some traction. This will be after benefitting from favorable taxation, ample corporate profits, and higher demand for infrastructure and services.
Australia is upping its economic integration with Europe and the Asia-Pacific region to boost the economy. The country has signed trade agreements in these regions while maintaining preferential relations with the US.
The unemployment rate of Australia was very low until the COVID-19 pandemic. It was 5.2%. In 2020, it reached 6.9%. As per the Australian Bureau of Statistics about 960,000 Australians are currently not employed. Unemployment is rising.
The number of people who want to work more also rose to 10.4%. IMF expects that the unemployment rate of Australia to increase to 7.7% in 2021. Then it could lower to 6.7% in 2022.
The agriculture sector employed 2.5% of the workforce in 2020. It contributed 2.1% to the country’s GDP. The services sector employs 77.7% of the workforce and contributes 66.1% to Australia’s GDP.
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