Australia Economic Snapshot
Economic Forecast Summary (May 2021)
GDP is projected to grow by 5.1% in 2021 and 3.4% in 2022, driven by domestic demand. Confidence is high and labour demand is strong. Rising incomes and a declining saving rate will support consumption. The unemployment rate will fall further. Nonetheless, restrictions continue to constrain some parts of the economy and insolvencies will rise from their current low levels. Until widespread vaccination is achieved, outbreaks may necessitate further restrictions.
Reform Priorities (April 2021)
Going for Growth 2021 - Australia
The pandemic took a particularly heavy toll on young businesses and highlighted existing education inequalities. The recovery brings an opportunity to boost innovation and reallocation, necessary to face the challenges of digitalisation and meet climate change targets in a cost-efficient way. It also provides a chance to boost educational opportunities for disadvantaged students and refocus on improving the living standards of Indigenous communities.
©Shutterstock/Anton Petrus
Read full country note
2021 Structural Reform Priorities
- Competition and regulation: Boosting productivity growth requires attention to the framework conditions in which businesses operate
- Education and skills: Inequality in education and the level of skills limit the growth capacity of the economy
- Environmental policy: Limited co-ordination of greenhouse-gas reduction measures across states and territories make it difficult to achieve the Paris Climate Agreement goals
- Tax system: Comparatively heavy taxation on incomes relative to consumption makes the tax mix less growth-friendly
- Inclusiveness: Well-being gaps between Indigenous communities and the rest of the population remain large, notably in educational attainment, life expectancy and employment rates
Economic Survey of Australia (December 2018)
Australia’s economy and labour market have been resilient, with rising employment and labour-force participation; projections show a continued robust output growth of around 3% in the near future. Living standards are good but socio-economic challenges remain, especially for more vulnerable groups with high risk of poverty. Australia faces economic challenges that, if not handled well, could see an end to its strong track record.