Current Account Deficit in Australia and Relevant Economy Policy
The overall economy condition of Australia
Australia’s economy has experienced positive reforms over the last two decades. These reforms have boosted the country’s economy and raised the country’s standard of living. In 2009, Australia was the 13th largest economy by nominal GDP of US$930.8 billion (Wikipedia). Positively engaged in world trade, Australia is ranked the 21st largest importer and 23rd largest exporter in the world (Economy Watch 2009). Export commodities are: coal, iron ore, gold, meat, wool, alumina, wheat, machinery and transport equipment. The top5 export destinations are China, Japan, North Korea, India and United States. Import commodities are: machinery and transport equipment, computers and office machines, telecommunication equipment and parts; crude oil and petroleum products. The top5 import sources are China, United States, Japan, Thailand and Singapore (Australia fact sheet 2009).
Balance of payments in Australia
Although Australia has achieved significant economy growth, it still has many problems in developing its economy. To be specific, Australia 's large current account deficit is currently the greatest concern to some economists. For the past three decades, Australia has had a BOP deficit with its CAD having grown from $195 million in December, 1979 to $18483 million in December, 2009 (ABSxls). With the enormous BOP deficit, Australia has to take measures to control the sources of BOP deficit, so that it will not fall into a debt crisis like Greece’s.
The latest BOP statistics are listed below:
Table1
Current account ; -18483
Goods and Services ; -7467
Goods and Services credits ; 60234
Goods and Services debits ; -67701
Goods ; -6898
Goods credits ; 46638
Goods debits ; 53536
Services ; -569
Services credits ; 13596
Services debits ; -14165
Primary income ; -10897
Primary income credits ; 9672
Primary income debits ; -20570
Secondary income ; -119
Secondary income credits ; 1608
Secondary income debits ; -1727
Australia’s economy has experienced positive reforms over the last two decades. These reforms have boosted the country’s economy and raised the country’s standard of living. In 2009, Australia was the 13th largest economy by nominal GDP of US$930.8 billion (Wikipedia). Positively engaged in world trade, Australia is ranked the 21st largest importer and 23rd largest exporter in the world (Economy Watch 2009). Export commodities are: coal, iron ore, gold, meat, wool, alumina, wheat, machinery and transport equipment. The top5 export destinations are China, Japan, North Korea, India and United States. Import commodities are: machinery and transport equipment, computers and office machines, telecommunication equipment and parts; crude oil and petroleum products. The top5 import sources are China, United States, Japan, Thailand and Singapore (Australia fact sheet 2009).
Balance of payments in Australia
Although Australia has achieved significant economy growth, it still has many problems in developing its economy. To be specific, Australia 's large current account deficit is currently the greatest concern to some economists. For the past three decades, Australia has had a BOP deficit with its CAD having grown from $195 million in December, 1979 to $18483 million in December, 2009 (ABSxls). With the enormous BOP deficit, Australia has to take measures to control the sources of BOP deficit, so that it will not fall into a debt crisis like Greece’s.
The latest BOP statistics are listed below:
Table1
Current account ; -18483
Goods and Services ; -7467
Goods and Services credits ; 60234
Goods and Services debits ; -67701
Goods ; -6898
Goods credits ; 46638
Goods debits ; 53536
Services ; -569
Services credits ; 13596
Services debits ; -14165
Primary income ; -10897
Primary income credits ; 9672
Primary income debits ; -20570
Secondary income ; -119
Secondary income credits ; 1608
Secondary income debits ; -1727
Bibliography: ABS 2009, Balance of Payments and International Investment Position, ABS 2002, Balance of Payments and International Investment Position , Carbaugh, RJ 2002, International Economics, 8th edn, Thomson-South Western College Publishing, Cincinnati, Ohio CIA 2010 the world fact book ---Australia, Economy Watch 2009, Australia Economy, Economy Watch 2009, Australia Economic Policy, McTaggart, D., Findlay, C. & Parkin, M. 2003, Economics, 4th edn, Addison Wesley, Sydney, pp. 808-819 Nguyen, D n.d., Macroeconomic Policy in Australia, Market Information and Research Section 2009, Australia fact sheet,