topic 2 stats

Question 1

movement towards globalisation and free trade started in

Answer 1

1970

Question 2

unilateral tariff reduction

Answer 2

1973 - Gough Whitlam’s 25% tariff reduction
1988 - Hawkes cuts to manufacturing tariffs (15% in 1989, 5% in 2000)

Question 3

Australia’s current import tariff position

Answer 3

• avg tariff rate at 3%
• agricultural tariffs at 2%
• PMV tariffs at 5%
• alcohol tariff at 10%

Question 4

trade surplus’

Answer 4

2022 = $140B
2021 = $121B
2020 = $77B
2019 = $49B

Question 5

exports

Answer 5

2022 = $670B
2021 = $520B
2020 = $475B
2019 = $470B

Question 6

Bias against china:

Answer 6

• 2016 Federal Government denied NSW state of Ausgrid, a Chinese company to buy state electricity for $25B and instead sold for $9B loss
• 2018 Huawei was blocked from a $50B bid from Australia’s 5g network

Question 7

Aus current exchange rate

Answer 7

pound sterling: 0.51
euro: 0.60
USD: 0.65

Question 8

global Fx trading figure

Answer 8

$4-$4.5T USD

Question 9

Aus was floated in

Answer 9

1983

Question 10

how many countries in TWI

Answer 10

17

Question 11

base period for TWI vs now

Answer 11

100 in 1970
over last 50yrs 62-65 (increase in int. comp.)
current TWI = 61.4

Question 12

covid stats

Answer 12

• EG 1.5%
• INF 0.8%
• cash rate 0.1%
• currency depreciation 0.58
• CA 2020 balance = $29.2 (first CAS in 40yrs) –> BOGS = $75.3
• 2021 NPY = $-22.7 (no investment)
• KFA 2020 balance = -$29.4/2021 = -$63.4

Question 13

resources boom eco stats

Question 14

GFC eco stats

Answer 14

• EG 1.1%

Question 15

George soros stats

Question 16

now eco stats

Answer 16

• 2.1% EG
• 4.1% INF
• 4.35% cash rate
• U/E rate 4.9%
• spot rate = 0.66

Question 17

renewed resourced boom eco stats

Question 18

Imports are

Answer 18

1/3 of CPI

Question 19

China’s pegged rate

Answer 19

• pegged at around 0.12 USD (undervalued)
• managed peg between 0.14 and 0.16 now

Question 20

last known time RBA dirtied the float

Answer 20

GFC

Question 21

what happens if countries run out of foreign reserves

Answer 21

IMF issues SDRs

Question 22

australia’s current foreign reserves are

Answer 22

35.2 USD bn reduced from last months 40B
avged at 30USD B

Question 23

Britain EU

Answer 23

• had to stabilise and peg their currency 2-3 yrs before entering the EU
• Britain’s GDP would be 2.5x higher if they stayed in the EU

Question 24

AUD exchange rate trends

Answer 24

2000-2008 (resources boom) = appreciation from 0.58 to 0.85
2008 (GFC) = collapse form 0.98 in July to 0. 60 in october 2008
2009-2010 (renewed resources boom) = appreciation from increase in commodity prices
2010-2013 = stable appreciation due to US’ QE at highest rate of $1AUD to $1.10
2014-2015 = depreciation from US’ eased QE, slower growth in China and uncertainty in investment
2020-2023 = US’ $2T covid-relief act and build back better act of $3.5T may cause AUD to weaken

Question 25

US QE

Answer 25

printed $85B a month for 3yrs totalling $4T injected into economy after GFC

Question 25

current AUD trade

Answer 25

exports are 25% of GDP up from 15% in 1950s imports are 18-22% of GDP

Question 26

australia CAD

Answer 26

avg CAD -3% to -6% of GDP (-$4.3B USD) since 1970s due to - high imports, low int. comp. lowest point is -$21.6B USD in 2015

Question 27

australia CAS

Answer 27

peaked at $21.7B USD in 2021 due to COVID (low imports, low net income debits) current CAS (28.5) is +1.1% of GDP falling from +2.5% in 2022 due to - increase mining investments meaning increase in NPY debits - interest rates rising steeply

Question 28

CAD is unsustainable when

Answer 28

it is more than -6% of GDP

Question 29

Australia's structural change exports

Answer 29

- agriculture fell from 80% of exports to 10% - manufacturing is 15% exports - mining now 60% of exports --> iron ore rose $200USD/ton and coal exports are estimated to rise 9.6% from 157M metric tonnes to 172M - services now 15% of exports

Question 30

CA trend

Answer 30

2010-2015 = improvement of CAD (BOGS improved due to less imports though steady exports, PY improved due to low interest rates) 2016-2019 = improvement of CAD (BOGS improved due to mining and LNG, PY improved due to low interest rates and US QE) 2020-2022 = CAS (BOGS improved due to mining and LNG, PY improved due to low interest rates) now = CAS moving toward CAD (PY worsening due to high interest rates)

Question 31

CA stats

Answer 31

-6.6% of GDP to -2.1% of GDP in 2015 - 1% in 2019 +3.4% in June 2021 and +2.5% in June 2022

Question 32

2020-2022 COVID KFA trends

Answer 32

- decrease in interest rates, FDI fell, decreasing KFA, increasing CAS - increase portfolio outflows, decreasing KFA, increasing CAS - now increasing interest rates moving back to CAD and increasing KFA

Question 33

types of flows in KFA

Answer 33

- before 2008 mining companies only issued bonds bc they were a long term infrastructure project - Aus' only invest in shares (mainly super is invested) - during GFC bonds collapsed uncertain cash out - from 2015, mining companies were up and running so they issued shares - hot money left AUS during covid

Question 34

Investment in AUS (deregulation of financial markets)

Answer 34

- inflows grown from $250B in 1980s to $4.5T now (UK and US are biggest investors, 22x bigger than China) - outflows grown from $150B in 1980s to $3.7T now - net foreign liability position $850B

Question 35

composition of exports

Answer 35

1. coal = $142.3B 2. iron ore = $124.4B 4. education = $26.6B 6. wheat = $14.5B TOTAL: $670.6B

Question 36

composition of imports

Answer 36

1. refined petroleum = $53.2 2. Vehicles = $27.7 3. personal travel = $26.8 TOTAL = $530.3

Question 37

direction of exports

Answer 37

1. China, although it fell from 36% to 27% of exports 2. Japan 17% 5. US 4.6%

Question 38

direction of imports

Answer 38

1. China 21.5% (manufactured goods) 2. US 10.7% (tech, travel, etc.

Question 39

international student numbers

Answer 39

619,371

Question 40

CA stats 2023

Answer 40

- total balance = $28.5 - BOGS = $138.8 - net goods = $150.7 - net primary income = -$108.8

Question 41

KFA stats 2023

Answer 41

- total balance = -$31.1 - financial acc = -$30.2 - net portfolio investment = $5.8 - net direct investment = -$13.4

Question 42

FDI

Answer 42

increased to 181% OF GDP