Australia's Economy

The Australian economy is the world's 13th largest economy in terms of nominal gross domestic product (GDP), with an approximate GDP of nearly $1.2 trillion Australian dollars (AUD). Australia's economy is dominated by the services sector, and includes financial services, tourism, and education, which makes up almost 70% of GDP. The agricultural and mining sectors account for 10% of GDP.

The continued demand for commodities from the ever-expanding Chinese economy helped to buoy Australia's economy during the global financial crisis, and China continues to be Australia's biggest trade partner. In addition to China, Australia exports commodities such as coal, iron ore, wool and gold to Japan, India, South Korea, the United States, the United Kingdom, and New Zealand. Australia also exports commodities in the form of food such as meat and wheat to these same countries.

Australia also does a fair amount of importing. Australia imports items such as crude oil and petroleum products along with machinery, transport, and telecommunications equipment and computer and office machines. Australia imports these items from several different countries, again including China, the United States, and Japan, as well as Thailand, Singapore, and Germany.

Australia is also focused on creating closer economic ties with its neighbor to the east, New Zealand. In 1983, a treaty known as the Australia New Zealand Closer Economic Relations Trade Agreement (ANZCERTA) was signed into law. It is a free trade agreement that was designed to ease some of the bureaucratic problems that previously plagued economic relations between Australia and New Zealand. Since its inception, ANZCERTA has increased integration between Australia's economy and New Zealand's economy, and by 2015 there are plans to create a trans-Tasman single economic market between the two countries.

During the first decade of the new millennium, Australia's economy changed in multiple ways. One change was the significant increase in the growth of the mining sector, to the tune of a 3.5% increase in GDP. The service sector of the economy also saw an increase in growth, by 4.5% of GDP, although that growth mostly came at a cost to the manufacturing sector. Over the last century, Australia has seen consistent growth in overall GDP, with an average annual rate of 3.4%.

Australia remained resilient throughout the global financial crisis, and as a result, continues to have low unemployment rates as well as a solid banking system. If things continue to go well, Australia's government could have a budget surplus by as early as 2015. Although the Australian government has many issues to deal with - namely, increasing economic activity, passing emissions legislation and coming up with solutions to other climate-related problems such as bushfires and droughts - Australia is poised to be in a positive economic position in the coming decade.