Australia’s economy is proving to be a victim of the headwinds from the US-China trade war and increasing Brexit tensions as it is now facing a sharp downturn which is also anticipated for the global economy.
The global growth in 2019 had declined once again to three percent, depicting a grave climb down from 3.8 percent two years ago leading to the International Monetary Fund predicting a “synchronized slowdown”.
Increasing trade barriers and higher uncertainty from swirling geopolitical issues ought to be blamed for the slowest pace in growth since the global financial crisis and slowing down manufacturing and global trade and
In its latest World Economic Outlook, the IMF has said that Australia’s economy will weaken to 1.7 per cent growth in 2019, down a full percentage point from 2.7 percent from the previous year.
It was confirmed by Treasurer Josh Frydenberg, in a statement given as a result of the dismal situation that the fundamentals of the Australian economy remain intact however there is a risk of headwinds.
In his defense, he added that Australia has a AAA credit rating, record labor market participation and welfare dependency at its lowest level in over 30 years. Australia has set a record of being the only developed nation with 29 years of consecutive economic growth.
He further added that the international challenges that are being posed are a shocking reminder and reason as to why Australia much stick with its existing economic plan, which will help in delivering lower taxes so that people have more disposable incomes, more infrastructure to create jobs and boost productivity.