World Economy

Australia Poised to Seize World Economic Record

Australia Poised to Seize  World Economic RecordAustralia Poised to Seize  World Economic Record

Australia is on the cusp of achieving something truly remarkable—not to mention unprecedented in modern world history.

In 26 days, as the clock ticks over to April 1, Australia will likely have bested the Netherlands to lay claim to the title of the longest economic expansion on record, entering the 104th quarter of economic growth without recession, Bloomberg reported.

The Dutch winning streak kicked off in 1982 thanks to the biggest natural gas field in Europe and lasted for 103 quarters before the Netherlands succumbed to the turmoil of the global financial crisis in 2008. The news that Australia has avoided a technical recession with growth rebounding in the December quarter was greeted with little more than a shrug.

Since the mining investment boom peaked about four years ago, the Aussie dollar has fallen significantly, supporting other exporters. Wages growth has fallen too, which isn’t great for workers, but certainly helps the country to recover international competitiveness. Lower interest rates have also responded to cushion jobs growth in other sectors.

According to a recent testimony to parliament by Reserve Bank governor, Philip Lowe, “we are now 90% through the fall in mining investment that has dragged on growth for about four years. While there are no major new investments on the horizon, mining companies have now begun investing again in upkeep of their existing infrastructure.

“Higher prices have given them the confidence to do a bit more sustaining investment–that is a positive development,” Lowe told the parliamentary committee. “We hear that in some areas, partly in western Australia, the higher prices are encouraging people to at least think about exploration again, whereas exploration activity had fallen way off. It is still going to be a headwind for a little while, but not like the headwind we have had for the last four years.”


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