For years, Australia has relied on investments from mining, however recently this has slowed down considerably, leaving the central bank to rely on tourism and new migrants to boost the economy.
However the population is headed towards the slowest growth rate for almost a decade; a warning sign for the economy. Without an influx of new workers increasing consumption and newly constructed houses, the economy’s growth is looking uncertain.
Australia’s population growth slowed to 1.3% in 2014 (which is double the average of other OECD countries but down from 2% merely two years previously). The decrease is in conflict with the Royal Bank of Australia’s (RBA) forecast for a 1.8% increase in the working-age population for 2015.
Tim Toohey whoc is an Economist for Goldman Sachs Group Inc. looked at the dropping figures; “Australia is likely to fall short of the projections by policy makers which is in line with the introduction of quantitative easing.’
Alongside fewer migrants, the natural increase in population also slowed in 2014 to the weakest it’s been since 2006. It represents a weakening of one of the key fundamentals the RBA has found to support a lull in investments not related to mining.