After 24 years of uninterrupted economic growth, Australia is entering the kind of difficult waters experienced by every other major developed country in the past decade.
Even if Thursday’s unemployment figures show more jobs were added last month, the Coalition is set to go into the next election with an unusually gloomy outlook.
Australians are finding it harder to get a job than at any time in more than decade and those who are in work are seeing the weakest wage growth for two decades. There are even fears that taxes might have to go up to cover a $25bn budget black hole caused by falling commodity prices.
As one leading economist put it, the lucky country is running out of luck.
Growth is still on target for a healthy at 2.8% for this year, according to the International Monetary Fund (IMF), the kind of number that would send European leaders scrambling for the tweet button. But the question of whether Australia loses its remarkable record of continuous growth depends, as with almost everything else in the economy, on what happens in China.
“Australia has gone 24 years without a recession thanks to good management and good luck,” said Saul Eslake, the chief economist at Bank of America Merrill Lynch in Sydney. “Up to the early 2000s it was managed well and then it wasn’t. But then the luck improved because of China’s huge stimulus after the global financial crisis. Now the luck is running out.”
via The Guardian