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The Economist explains: How Australia has gone 25 years without a recession

  • WESTERN AUSTRALIA’S iron ore and Queensland’s coal were at the centre of Australia’s recent mining boom, stoked by the red-hot growth of China’s steelmaking industry.
  • Australia’s mining booms over the past 160-odd years made the country feel rich and confident while they lasted.
  • The Reserve Bank of Australia, the central bank, forecasts a rate of about 3% this year and next.
  • As the boom waned, the bank cut its benchmark rate from 4.75% in 2011 to 1.5% last year.
  • These factors have allowed the older and more populous states of New South Wales and Victoria to take up the economy’s slack: investment in industries other than mining has been growing by about 10% a year in New South Wales since 2013.

WESTERN AUSTRALIA’S iron ore and Queensland’s coal were at the centre of Australia’s recent mining boom, stoked by the red-hot growth of China’s steelmaking industry. At its height about five years ago, mining investment accounted for 9% of national GDP. But as investment started to decline in 2013, Western Australia’s debt soared.

@TheEconomist: How Australia has gone 25 years without a recession

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The Economist explains: How Australia has gone 25 years without a recession