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Australia Economic Progress Report

Current Events

The rate of employment

Employment rate is a key factor in many economies and determines a big chunk of the revenue a country earns. A decrease in the rate of employment guarantees an increase in the revenue earned by a country and vice versa.

There has been a significant increase in Australias employment rate from sixty two percent in December last year to sixty three percent in January this year. This has therefore resulted to an increase in disposable income which is very significant as the income may be used in investment which with a positive turnover may payout in terms of profit. The amount of profit generated however is proportional to the type of investment as there are of different kinds, that is

Liquidity Risk

Risk of not having the capacity to sell a venture at a sensible expense plus get money out at long last. Selling the venture may mean that the seller has to recognize a lower cost hence incurring a loss.Concentration Risk
A loss hazard on the grounds that your cash is gathered in one venture. Broadening your investment helps spread risk over kinds of ventures, geographic areas and businesses.

Credit Risk

Risk of the administration element that issued the bond facing monetary challenges and will not almost certainly pay interest or reimburse at maturity, principa invested.

Reinvestment Risk

Risk of incurring losses from re-investing pay at a lower loan fee.

Inflation Risk

The risk of loss of purchasing power in light of the fact that the estimation of speculations do not go hand in hand with the inflation rate. Inflation reduces the purchasing power of money after some time a comparative proportion of money will buy less stock and ventures.

Horizon Risk

The risk that the horizon of your investment might be reduced due to an unexpected occasion, for instance, unemployment. This may constrain one to offer investments that they were hoping to hold as long as possible.

Longevity Risk

Hazard of outlasting ones investment funds. This is especially applicable for individuals who are resigned, or retiring soon.

Foreign venture Risk

The incurring loss risk while investing resources into foreign nations. Purchasing outside ventures may bring about hazards to the investor, for instance, the danger of nationalization.

Market Risk

Hazard of ventures value decreasing in view of monetary advancements or other factors that may have an effect on the whole market. Some of the kinds of market risks are
Equity risk Value risk is the hazard is the risk of misfortune because of a drop in the market cost of offers.
Interest rate chance risk of incurring losses as a result of an adjustment in the interest rates.
Currency risk claiming of foreign ventures may bring this risk about. This is the loss risk due to inconsistencies in exchange rates.
This increase in employment rate hence results to economic growth. The major sectors that ma gain from this are the construction, tourism and agricultural sectors. This will lead to increased agricultural activity due to increased labour, increase in quality of service in the tourism sector and general industrialization due to increased constructions. All in all, an increase in the employment rate generally favours the economy of any country.

GDP Highlights

GDP per capita is an estimate of a countrys total financial output divided by the total population and balanced for inflation. GDP is used to compare living standards among nations.
Per capita GDP GDP/Population
GDP
YEAR
Consumption expenditures hat experienced the largest growth
Insurance and other financial services by 57.7
Rent and other dwelling services by 62.2
Food by 63

Labour Market Highlights

Key
Grey line- unemployment rate persons
Orange line unemployment rate males
Blue line unemployment rate females
Male unemployment rate has experienced the largest percentage change over the recent quarter

Machinery operators and drivers field has experienced the greatest switch I occupation category

Labourers field has experienced the smallest difference between male and female employment

Sales workers field has had a higher proportion of females than males

Price Movements

Inflation rate (Current CPI Initial CPI)/Current CPI100

Recreation and culture (Sep 1990 Sep 2018)
(105.5 75.6) / 105.5 28.341232
Clothing and Footwear (Sep 1990 Sep 2018)
(94.4 - 94.0) / 94.4 0.4237288
Housing (Sep 1990 Sep 2018)
(103.0 - 80.5) / 103.0 21.84466

Risk Outlook

Australias economy being among the largest in world and despite the uninterrupted twenty six years of economic development, there may be several risks that the nation country may face. Some of them include
Prices of commodities are volatile especially minerals such as coal, iron and ore
Australias economy highly depends on Chinese interest

Underemployment

Household debt composed of 185 of the nations gross disposable income
Infrastructure shortage relative to Australias immense domain
Inconsistencies and quarrels between states

The economys core is made up of business and government spending, whereas family and customer segments struggle due to low wages, sixty percent of the economy is made up of consumer spending. The nation additionally profits by expansive scale fares of horticultural items. The Australian Treasury anticipates a real GDP development of 2.8 this year, as it anticipates that household consumption should boom after a growth in the countrys labour market.

The inflation rate is expected to develop to 2.3 this year from 2.2 a year ago and by 0.2 in 2020. Current government balance demonstrates a moderate shortfall of - 1.2 of GDP. An expansion in product costs padded the augmenting of the deficiency and keep public debts moderate, with gross government obligation achieving 40.5 of GDP in 2018. In addition, to boost economical growth, Australia is working with the Asia-Pacific area, particularly China and Europe. It now consented to exchange arrangements while keeping up special relations with the United States. Australias economy is progressively subject to China much more since the organized commerce bargain between the two nations happened. Be that as it may, 2018 indicated more fragile capital inflows from China.

The unemployment rate is very low, assessed at 5.3 in 2018. Reports of underemployment, comprising of labour that needs to work more, was rising Australia currently has approximately one million underemployed individuals. Australia is facing increased population and environmental change impacts, for example, the loss of 20 of the Great Coral Reefs coral because of a cataclysmic fading circumstance and the expanding recurrence and term of dry seasons putting an uncommon dimension of water weight on the Australian horticulture.

Most importantly is the dependency on China which may result to a negative impact on Australias economy if Chinas economy recesses. Australia may also face loss of their resources and infrastructure to China, for instance the recent project aimed at entrusting an entire Australian state electrical network to a Chinese organization which was however rejected. A similar decision was made concerning a large ranch in Australia.

References

HYPERLINK https//tradingeconomics.com/australia/employment-rate
https//tradingeconomics.com/australia/employment-rate
HYPERLINK https//www.economicshelp.org/macroeconomics/unemployment/costs/
https//www.economicshelp.org Macro Economic Notes
https//import-export.societegenerale.fr/en/country/australia/economy-country-riskhttps//www.getsmarteraboutmoney.ca/invest/investing-basics/understanding-risk/types-of-investment-risk/

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