Global, United States and Australian Economic Review & Forecasts

Global, United States

and Australian Economic

Review & Forecasts

Table of Contents

Section                                                                                                 Page

Table of Contents        

Executive Summary        

Economic Review        

Global Economy        

The United States Economy        

The Australian Economy        

Five Year Economic Forecasts        

Global Economic Forecast        

United States Economic Forecast        

Australian Economic Forecast        

Bibliography        

Executive Summary

The Global, United States and Australian economies that are presented in this paper have been performing well in the period review from 1990 to 2000.  The downturns during this period in each of these economise have been due to the influences of the major items of the Gulf War in 1991, the bombing of the Government building in Oklahoma in 1995, and the slowdown in the Asian economies in 1998.  Of all the world commodity prices, the world price for oil has been one of the dominant factors in 1997 and the late nineties, with the high prices affecting the manufacturing and processing industries and helping to slow the major economies.

The forecast for the next five years for the Global, United States and the Australian economies is for a slowing down, even recessionary period for 2001 and 2002.   The forecasts for the slowdown in this paper are lower than the published data from the International Monetary Fund (IMF), the ANZ bank and the Australian Government partly since the slowdown has been deeper then originally predicted, due to the shocks in the technology industry and the effect of oil prices and the effects of the terrorist attacks in America and retaliatory strikes on Afghanistan.  This will further slow the economy by affecting the consumer confidence in the major economies and increasing the oil price by the OPEC countries in the short term, due to security concerns in the Middle East region.  After this conflict is resolved, the upward growth trend is expected to return for 2003 to 2005, due to the overall strength of the U.S. economy and the economic reforms being implemented in Japan starting to turn their economy around.

Economic Review

The economies of the world have generally been on an upward trend for most of the nineties and into the new millennium.  The global economy, with particular emphasis on the economies of the world’s advanced countries, will be investigated, along with the economies of the United States of America and Australia.

Global Economy

The global economy has had an average growth rate of 3.1% from 1990 to 2000, as shown by the Gross Domestic Product data in Figure 2.1.  

[pic 1]

            (Source: 2001/2001 Budget Papers, p3-13, 2001)

Figure 2.1 World GDP Data for 1990-2000.

Although the overall trend for this graph is one of growth, there have been 3 major periods of lower growth: the first in 1990-1991 during which time Iraq invaded Kuwait and the coalition forces were forced to undertake the Gulf War to remove them; the second being the bombing of the Oklahoma building in the U.S. in 1995, which although it only affected the U.S., the world growth rate was slowed since America contributes approximately 28% of the Global GDP; and the third being due to the Asian economic slowdown in 1998.  

Other Global economic indicators for 1993 to 2000 are shown in Figure 2.2.

[pic 2][pic 3]

(Source: IMF World Economic Outlook, Table 8, 2001)                    (Source: IMF World Economic Outlook,Table 2, 2001)

[pic 4][pic 5]

 (Source: IMF World Economic Outlook, Table 4, 2001)             (Source: IMF World Economic Outlook, Table 22, 2001)

Figure 2.2 Global Indicators for 1993-2000

Since there was no data on these indicators found for the world economy as a whole, the data used for the global indicators has been taken from a collection of the advanced economies of the world, as denoted by the IMF World Economic Outlook.  These indicators tell basically the same story as the GDP data of growth through the nineties with a few main slowdown periods.  The upturn of inflation in 2000 sounded as a warning that the prolonged period of growth was showing signs of slowing down.  The sharp rise in the world oil price from 1998 also had a slowing effect on the economy, with the extra cost starting to slow the global economy, particularly affecting the manufacturing and processing industries of the advanced economies of the world.

The United States Economy

Due to the size of the U.S. economy, it has had a dramatic effect on the global economy in the last ten years.  Figure 2.3 shows the growth in the U.S. economy from the period of 1993 to 2000.

[pic 6]

                (Source: IMF World Economic Outlook, Table 2, 2001)

Figure 2.3 U.S. Real GDP (1993-2000)

The overall pattern for the U.S. economy has been one of growth, with the main periods of slowdown in 1995, 1998 and 1999, which relate to the previously stated bombing of the government building in Oklahoma and the slowdown in the Asian economies.  The average growth rate for this shown period was just below 4% per year.