The Economy of Australia in 2023 - Industry & Market Trends

Last Updated: October 30, 2023



25.366 million


1.7 trillion

GDP Growth Rate

3.7 %

GDP Per Capita

64814 USD

Land Size

7692020 km²


1.7 Child

Unemployment Rate

3.7 %

Inflation Rate

6.6 %

What is The Overall Outlook in Australia ?

Australia is a highly developed country with a population similar to Taiwan. In 2021, its total GDP reached 1.5 trillion USD, ranking 13th globally. The prosperous living standards and strong domestic economy of the Australian people have led to a per capita income of nearly 60,000 USD, ranking 9th globally, higher than many wealthy European countries.

Over the past three decades, Australia has undergone a series of transformations. In the early 1990s, the focus was on reforms in industrial relations, a reduction in trade protection and a significant decrease in tariffs, as well as the loosening of restrictions and regulations on the financial industry. The large increase in commodity prices in the early 2000s and the significant increase in resource investment (Resource Boom) in Australia between 2005 and 2015 all supported the country’s strong domestic market and highly resilient economic growth.

Whether during the financial crisis or the sharp drop in commodity prices around 2015, Australia did not experience negative growth. Although this pacific nation, which has seen continuous growth for 30 years, suffered a contraction of 2.4% under the impact of the pandemic, it still rebounded with a growth of nearly 5% in 2021, even after China banned all imports from Australia at the end of 2020.

Australia’s future development will be based on several factors, including the export of commodities, a stable labor market, strong domestic consumption, stable political and business environment, and the development of the service industry (tertiary industry) in Australia.

Commodity exports mainly come from China, India, and the increasing population, consumption power, and infrastructure needs of the entire ASEAN market. Compared to competing economies, such as Brazil, Australia has a clear relative advantage due to its geographical location. Although relations with China have sharply declined after the pandemic, with the Labor party in power and China’s demand for Australia, the relationship is expected to continue to improve.

Australia - Real GDP Growth
Note: Real GDP Growth (%) | Forecast After 2023 (IMF)

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Economic Structure

The latest GDP update was in October 2023, updating the data on the contribution of GDP output in various sectors for the year 2022, as a proportion of the total GDP. The data is sourced from the World Bank, IMF, and local government statistics. Predictions on the sources of GDP contribution are from the EIU.

Private Consumption
Gov Expenditure
Capital Formation
Economic Growth(By Type)
Note: Real GDP Growth (%) | Forecast After 2023 (EIU)

Overall Economic Outlook in Australia?

Before the pandemic, the Australian economy experienced 28 years of uninterrupted growth since 1991. Despite the Internet bubble and financial crises, it maintained an average growth rate of 3%, significantly higher than the 2.2% growth rate of high-income countries during the same period. Even after the pandemic, Australia’s recession was only 0.1%, far below the global average.

In terms of the main drivers of Australia’s economy, structural changes have occurred over time. In the first decade of the 21st century, from 2000 to 2009, private consumption growth was nearly on par with export growth, both close to 3.7%. During this time, Australia’s economic growth remained at around 3.2%. However, in the following decade, Australia’s exports grew with the demand for natural resources in emerging markets (particularly China) and the economic expansion, allowing the country’s export growth rate to reach 4% from 2010 to 2019, while private consumption in the same period was 2.6%.

Nonetheless, during the pandemic, the global economy stagnated in 2020, and then China’s zero-tolerance policy and trade penalties in 2021 severely impacted the momentum of Australia’s exports, causing a recession for two consecutive years at the export level. In 2022, although China ended the zero-tolerance policy at the end of the year, it was too late, and falling iron ore prices also hindered export recovery. While it is generally expected that Australia’s exports will return to their original growth in 2023, China’s slowing economy will increase the importance of trade with other regional countries for Australia. Australia’s participation in the CPTPP and active pursuit of trade agreements with the European Union and India will help diversify its dependence on the Chinese market. From 2020, China’s share of Australia’s exports will also drop by 29.5% (as of August 2022).

Regarding private consumption, despite negative growth in 2020, it quickly rebounded, supporting a 2.7% growth rate in 2021, higher than the GDP growth rate. In 2022, post-pandemic consumption growth factors contributed to a growth rate as high as 6.5%. However, in the near term, tighter monetary policy will negatively impact private consumption momentum, especially in Australia, where consumers have already spent much of their accumulated wealth during the pandemic. Similarly, capital formation, or fixed investment, will also be affected by monetary tightening, although investments in renewable energy and sustainable infrastructure will continue.

Exchange rate: The Australian dollar depreciated against the US dollar in 2022 but appreciated on a trade-weighted basis. By mid-2023, factors such as the Federal Reserve’s anticipated end of the interest rate hike cycle, slowing US economic growth, continued interest rate hikes by the RBA, and Australia’s GDP growth will all support the Australian dollar. Additionally, China’s strong GDP growth in the first quarter of 2023 is likely to boost Australia’s exports as pandemic restrictions are lifted, further promoting the appreciation of the Australian dollar. ING predicts that the Australian dollar will appreciate from the current 0.67 to 0.71 by the end of 2023.

Inflation: In its February 2023 Monetary Policy Statement, the Reserve Bank of Australia cited supply chain disruptions related to the pandemic and the Russian invasion of Ukraine as the main causes for inflation increases over the past year. However, strong domestic demand, a tight labor market, and capacity constraints due to natural disasters (such as floods) disrupting certain industries also contributed to rising prices. Overall, the inflation rate for 2022 is 7.8%, with a year-end forecast of 6.25%.


25.366 million

Land Size

7692020 km²


1.7 trillion

GDP Per Capita

64814 USD


3.7 %


6.6 %


86.1 %


1.7 Child

GDP Per Capita
Note: Real Growth (%) | Forecast After 2023 (IMF)
GDP Per Capita (PPP)
Note: Real Growth (%) | Forecast After 2023 (IMF)
Unemployment Rate
Note: %
Inflation Rate
Note: %

Other Economies

Industry Structure

The latest GDP update was in October 2023, updating the data on the contribution of GDP output in various sectors for the year 2022, as a proportion of the total GDP. The data is sourced from the World Bank, IMF, and local government statistics. Predictions on the sources of GDP contribution are from the EIU.

Economic Growth(By Sector)
Note: Real GDP Growth (%) | Forecast After 2023 (EIU)

Demographics Overview

The overall population of Australia in 2022 is about 26 million people. It is the sixth largest country in the world in terms of land area. Most of the inland areas are deserts. Its population density is one of the lowest in the world at 3.3 people per square kilometer. It is far lower than the Asian average of 107.5 people per square kilometer, so the vast majority of the population is concentrated in big cities such as Sydney and Melbourne.

Australia’s population growth rate has been higher than most developed countries. It was 1.5% in 2019, much higher than the average of 0.5% in OECD countries. But as the fertility rate continues to decline slowly, the average annual growth rate is expected to drop to 0.7% in 2030 and continue to slow down in the future.

The United Nations Commission on Population and Development predicts that the country’s working population will continue to grow. But the proportion of the working-age population will continue to decline, from 64.9% in 2020 to 64.2% in 2030 and 61.1% in 2050. Compared with other high-income countries, there is not much difference.

Although still relatively small relative to other OECD countries, the proportion of Australia’s population over 65 has continued to rise slowly in the past, driven by low fertility and increasing life expectancy, from 11 in 1990 to % increased to 17% in 2020.

And the natural growth portion (births minus deaths) fell from 142,000 in 1990 to 135,000 in 2020. The national fertility rate has decreased from 1.9 babies per woman in 1990 to 1.6 in 2020, while life expectancy at birth has continued to increase to 83 years in 2020, further pushing up the proportion of Australia’s elderly population.

Therefore, for Australia, net immigration is a very important driving force for the growth of the national population. Although the fertility rate is still high compared with other high-income countries, the number of immigrants in recent years has exceeded the natural growth of the country. Since 1990, Net immigration increased from about 96,000 at that time to 236,000 in 2019, accounting for about half of the total population growth during the entire period, while Taiwan, with the same population size, had only 10,000 net immigrants in 2019 More than 2,000 people.

Although since 2020, due to the international border restrictions introduced in response to the pneumonia epidemic, there has been a net immigrant outflow for the first time since World War II, but overall future population growth still depends on immigrant inflows, and net immigrant inflows are expected to exceed 4 ‰ in the next few decades .

As mentioned earlier, the national population is concentrated in coastal areas, with Victoria, Queensland, and South Wales accounting for 72% of the total population. Population growth in Sydney, Melbourne and southeast Queensland accounted for about 75 per cent of the total growth over the past three years . Strong population growth in the three largest regions is spreading to surrounding areas, making these cities population centers in their own right.

Population +

262 k people


300 k people


178 k people

Net Migration

140 k people

Australia - Population Growth Drivers
Note: % | forecast after 2023
Australia - Age Structure - Historical & Forecast
Note: % | forecast after 2023

Natural Growth

4.7 ‰

Net Migration

5.4 ‰

Young Dependency

30.1 %

Old Dependency

25.7 %

Australia - Median Age
Note: Age
Australia - Demographic Structure
Source: UN Population; OOSGA Analytics

Political Overveiw

In 1901, the British passed legislation allowing the six colonies of Australia to be fully self-governing and formed the Commonwealth of Australia. Since then, Australia and the United Kingdom have gradually alienated, and in 1986, the legislation completely separated from the United Kingdom to become an independent Commonwealth of Australia. However, in terms of constitutional monarchy, Australia still respects the British monarch as its Head of State, similar to India, Canada, and dozens of others.

During World War II, as the United States became the dominant player in the Asia-Pacific region after the war, Australia and the United States increased military exchanges, and the United States also replaced the United Kingdom as Australia’s main military alliance. During the Cold War, intelligence cooperation by the Five Eyes alliance further strengthened this situation. In recent years, with the return of the United States to the Asia-Pacific under the Obama administration, and the establishment of the military-diplomatic-security partnership AUKUS during the Trump administration, exchanges between Australia and the United States have also been greatly strengthened.

In terms of trade, China has been Australia’s largest trading partner since the end of 2000. However, in recent years, there has been a strong deterioration between the two nations citing factors such as military alliance with the US, geopolitical tensions, and a much stronger stance took by the previous Morrison government. This has eventually propelled China to impose trade penalties on Australia through import restrictions and other means. However, due to factors such as China’s domestic demand and the new government (the Labor Party government)’s softening attitude towards China, the relationship between the two parties has gradually warmed up.

While the Labor party, the current governing body, advocate for a stronger role of the state in the economy, they also promote deeper collaborations with the private sector. They plan to prioritize green energy, workplace inclusion, and public-sector reform. In terms of climate change, the government is seeking to overhaul the “safeguard” mechanism that enforces emission-intensity reductions among big polluters by mid-2023. This reform is part of a package of measures designed to reduce emissions to 43% below 2005 levels by 2030 and achieve net-zero emissions by 2050. The government will provide financing for green energy, upgrading the electricity network, and promoting the adoption of electric vehicles to create business opportunities.

Labor intends to reorient the country’s institutions to achieve its vision. The Reserve Bank of Australia (RBA) may undergo an independent review that could broaden its mandate beyond inflation targeting, while the Productivity Commission may undergo reforms to prioritize productivity over other macro areas. The National Anti-Corruption Commission, which was legislated for in 2022, will begin operations in mid-2023.

Australia - Government Spending (% of GDP)
Note: (%)|2023後為預測(IMF)

Current Account Balance

18.36 Billion

Current Account Balance (% of GDP)

- %

Gov Net Landing/Borrowing(% of GDP)

-2.3 %

Gov Gross Debt(% of GDP)

50.7 %

Australia - Current Account Balance
note: (% of GDP) | Forecast After 2023
Australia - Gross Debt
note: (% of GDP) | Forecast After 2023

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  • Economic Data:OECD, World Bank, IMF、Government Statistics Bureau
  • Currency Exchange:Based on IMF data in 2023/1
  • GDP Growth Projection:OECD、IMF, OECD, EIU、Government Bureau
  • Demographics:UN Population Database
  • Race, Culture, and Languages:CIA Factbook
  • Unemployment Rate Projection:ILO, UNECE
  • Trade:UN Comtrade, UNCTD
  • ICT Infrastructure:ITU
  • Data Calculation & Regression:OOSGA.org
  • Analysis:OOSGA Analytics
Author: Economic Team, CR Team

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