Australia

Australia has enjoyed a robust economic performance despite the commodity price and mining investment bust. The moderate impact of the large shocks since 2011 reflects prompt monetary easing, a flexible exchange rate acting as a shock absorber, export orientation to the dynamic Asia region, flexible labor markets, relatively high population growth, and strong institutions. Nevertheless, Australia has also been confronted with symptoms of the “new mediocre” since the Global Financial Crisis, including a downshift in average GDP growth. And with declining interest rates, already high house prices and household debt ratios have started to rise again.