Australia’s best economic fundamentals since 1964

 

The current economic data in Australia are about as good as one could expect to see.

Australia has GDP growth of 4.3%, at the same time inflation is running at 1.3%, at the same time the unemployment rate is below 5.5% (5.2% to be precise), at the same time mortgage interest rates are below 7% (6.85% for the standard variable rate).

Delving into the various data bases to try to match up a time when Australia’s GDP growth was 4% or more, inflation was 1.5% or less, the unemployment rate was 5.5% or less and the standard variable mortgage interest rates was 7% or less, and I came up with March quarter 1964.

That was a few months after the assassination of JFK; Robert Menzies was Prime Minister; Arthur Calwell was Leader of the Opposition; the Beatles visited Australia; and Donald Horne’s The Lucky Country was first published.

Clearly it’s been a long time since Australia has enjoyed these current economic fundamentals.  It’s great news that we should celebrate and enjoy.

One massively inspiring fact is that in 1964, Australia’s per capita GDP (US$ terms) was $2,250.  In 2012, the IMF estimate it will be $69,000, an increase of more than 2,600%.  We are a very rich country.

If over the next 3 or 5 or 10 years, Australia can sustain GDP growth of 3.25%, inflation at 2.5% (the RBA target), have the unemployment rate near 5% and have housing affordability assisted by reasonable levels for interest rates, we’ll be doing exceptionally well.