Australian Consumers Experiencing an Economic 'Golden Era'
Sunday, 08 July 2007
According to a recent report in The Australian, it’s boom time in the land Down Under. Low interest rates, low inflation, strong corporate profits, and a booming marketplace are fueling an even brighter future for an economy that already hasn’t seen a recession in 16 years.
Australian economist Dr. Don Stammer says the reasons for the booming economy are threefold. The first is “financial market and labor market reforms in the 1980s, 1990s, and to a lesser extent in this decade.”
The second is the “China boom.” China’s rapid industrialization has bumped up an unprecedented demand for Australia’s raw materials, like coal and iron ore. India’s growth is boosting these markets as well.
The third is the float of the Australian dollar. "When Asia went into recession in 1998, we avoided it because the dollar fell,” Stammer says. “When the world boomed later, we didn't see the full extent of that because the dollar went up." This apparently kept things right where Australia needed them to be for long-term stability.
Australian pundits are predicting “company profits” to have grown 15-17 percent in 2006-07, while some economists say growth next year will be a lesser, but still healthy, 12-15 percent, according to The Australian.