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A quarterly magazine of the IMF

March 2007, Volume 44, Number 1

Country Focus

Australia

As one of the world's leading exporters of mining commodities such as coal and iron ore, Australia has been adjusting its macroeconomic policies to the recent large rise in international commodity prices.

Rising export commodity prices helped to cushion the effects of a welcome cooling in the housing market in recent years... ...by stimulating strong business investment, especially in mining. Australia is now in its 16th year of uninterupted economic growth... ...and unemployment has fallen to a three-decade low. Consumer price inflation has edged up to about 3 percent... ...and the Reserve Bank of Australia has lifted interest rates, while the exchange rate has settles at a relatively high level. Net public debt was recently eliminated, aided by budget surpluses in 8 of the past 9 years. Further surpluses are projected, even making prudent allowance for lower commodity prices. With the productivity benefits of past reforms fading, Australia has adopted an ambitious reform agenda to support sustained strong economic growth over the coming decade.

Sources: Australian Bureau of Statistics; Reserve Bank of Australia; and Australian Treasury.