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      Some Facts About Australia        

Omkar Goswami


Truth be told, I’m fed up of the slew of bad news from India. Yet another quarter of miserably low GDP growth; the High Command’s hope that the Food Security Act will get it votes in 2014 irrespective of how it bankrupts the exchequer, and the opposition going along en masse since none wants to be labelled as ‘anti-poor’ however ridiculous the new law may be; the rupee going downhill faster than all other emerging market currencies; Veerappa Moily’s touch of genius when he advocates shutting petrol pumps at 8 pm as a way to combat the widening current account deficit, while gas-guzzling motorcades accompany every minister wherever they go; ex-RBI governor Subbarao’s impassioned pre-exit defence of why he was so totally right and all else, especially the finance ministry, were so wrong; and our prime minister’s resoundingly reassuring speech to Parliament.

This fortnight, I wanted to look elsewhere — at a continental country which, despite the global economic mess, is managing to do extremely well for itself barring Test cricket. The country is Australia whose land and seas have by far the largest number of lethally poisonous creatures known to man, and where the verbal combativeness of its members of parliament can make our most intemperate MPs blush in shame.

Australia is in general election mode. The Labor Party under prime minister Kevin Rudd, all of 55 years, who returned to the hot seat after ousting Julia Gillard in June this year, is in bruising fight to win a third term for his party; on the other side of the ring is Tony Abbott, also 55 years old, of the opposition Liberal-National coalition who is determined to win the election, which is to be held on 7 September. However, amidst electoral blood-letting and global economic mayhem, the country keeps purring along. Incidentally, Abbot won by a landslide.

For April-June 2013, Australia’s real GDP grew by 2.6 per cent over the same quarter of the previous year. It was 10 basis points higher than the annual growth achieved in January-March 2013. Remember, we are dealing with a developed OECD nation. Comparisons with others of that club are: the USA at 1.4 per cent; Japan at 0.9; the Euro area at (-)0.7; Canada at 1.4; and the UK at 1.5. In recent times, Australia has often grown faster than South Korea, which would have been inconceivable even five years ago. In plain-speak, as far as GDP growth in concerned, Australia is the best among all developed nations.

Now consider unemployment. As of July 2013, the country had an unemployment rate of 5.7 per cent. Compare this with the US, which is doing well, but still has unemployment at 7.4 per cent; the Euro area at 12.1; Canada at 7.2 and Britain at 7.8 per cent.

Australia’s consumer price inflation for the quarter April-June 2013 was 2.4 per cent. While this may be higher than the US at 2 per cent, and more so compared to Canada at 1.3 and the Euro area at 1.6 per cent, it is lower than many of its Asian neighbours such as China, Hong Kong, Indonesia and India.

At 1.3 per cent of GDP for 2013, Australia also has a far lower fiscal deficit than many other nations. Compare this with the USA which is at 4 per cent, the Euro area at 3.3, Japan at 8.3, Britain at 2.9, Canada at 3 and even China at 2.1 per cent, and you realise that the Aussies have been careful with public finances. Consequently, Australia’s government debt to GDP for 2013 is pegged at 20.7 per cent, which is very creditable compared to 212 per cent for Japan, 102 for the US, 91 for the Euro area and the UK, 85 for Canada and even 24 per cent for China.

And the currency has hardly depreciated in twelve months. So, here is a country that is chugging along just fine despite global volatility everywhere. If only it can play better cricket and gives a thrashing to the Poms!

Published: Business World, October 2013


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