Transcript The view from the ground - Department of the Treasury

The Macroeconomic and Structural
Implications of a Once-in-a-Lifetime
Boom in the Terms of Trade
David Gruen
24 November 2011
Terms of trade
200
Index
Index
200
(f)
175
175
150
150
125
125
100
100
75
75
50
1869-70
50
1889-90
1909-10
1929-30
1949-50
1969-70
Note: The 2011-12 Budget forecasts are used for the assumed future evolution of the terms of trade.
Source: ABS Catalogue Number 5206.0 and Treasury.
1989-90
2009-10
2
Terms of trade
160
Index
Index
160
Forecasts
140
140
Current
120
120
100
100
Forecast from 2005
MYEFO
1970s
80
80
60
60
40
40
0
4
8
12
16
20
24
Quarters
28
32
36
40
44
Note: Quarter 0 is June 1970 and June 2002. The 2011-12 Budget forecasts are used for the assumed future evolution of the terms of trade.
Source: ABS Catalogue Number 5206.0 and Treasury.
3
Nominal value of the $A (TWI)
140
Index
Index
140
Assumption
120
120
Current
100
100
1970s
80
80
60
60
0
4
8
12
16
20
24
Quarters
Note: Quarter 0 is June 1970 and June 2002. Source: RBA and Treasury.
28
32
36
40
44
4
Growth in non-farm GDP
10
Per cent, tty
Per cent, tty
8
10
8
1970s
6
6
Current
4
4
2
2
Forecasts
0
0
-2
-2
0
4
8
12
16
20
24
Quarters
28
32
Note: Quarter 0 is June 1970 and June 2002. Source: ABS Catalogue Number 5206.0 and Treasury.
36
40
44
5
Consumer prices
20
Per cent, tty
Per cent, tty
15
20
15
1970s
10
10
5
5
Current
Forecasts
0
0
0
4
8
12
16
20
24
28
32
Note: Quarter 0 is June 1970 and June 2002. Source: ABS Catalogue Number 6401.0 and Treasury.
36
40
44
6
Male average weekly earnings
(total earnings, all employees)
40
Per cent, tty
Per cent, tty
30
40
30
1970s
20
20
10
10
Current
Forecasts
0
0
-10
-10
0
4
8
12
16
20
24
Quarters
28
32
Note: Quarter 0 is June 1970 and June 2002. Source: ABS Catalogue Number 6302.0 and Treasury.
36
40
44
7
Australian government
general government expenditure
8
(deviations from year 1)
Per cent of GDP
Per cent of GDP
8
6
6
4
4
1970s
2
2
Current
0
0
Forecasts
-2
-2
-4
-4
1
2
3
4
5
6
7
8
9
10
11
Years
Note: Year 1 is the financial years 1970-71 and 2002-03.
Source: Final Budget Outcome 2010-11 and 2011-12 Budget.
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Unemployment rate
10 Per cent
Per cent 10
8
8
1970s
6
6
Forecasts
4
4
Current
2
2
0
0
0
4
8
12
16
20
24
28
32
36
40
44
Quarters
Note: Quarter 0 is June 1970 and June 2002. Source: ABS Catalogue Number 6202.0 and Treasury.
9
Sectoral shares
100
Per cent
Per cent
100
80
80
60
60
40
40
20
20
0
0
Decade to 2002-03 2003-04 to 2009-10
Non-mining
2010-11
Agriculture
Source: ABS Catalogue Number 5206.0 and Treasury.
2011-12(f)
Mining
2012-13(f)
Mining-related
10
Sectoral contributions to GDP growth
5
Per cent
Per cent
5
4
4
3
3
2
2
1
1
0
0
-1
-1
Decade to 2002-03 2003-04 to 2009-10
Agriculture
2010-11
Mining and related
Non-mining
2011-12(f)
Stat disc
2012-13(f)
Real GDP
Source: ABS Catalogue Numbers 5204.0, 5206.0 and Treasury.
11
Sectoral growth rates
(three-year centred moving average)
25
Per cent
Per cent
25
Forecasts
20
20
15
15
Mining-related
10
10
Non-mining
Mining
5
0
1989-90
5
0
1993-94
1997-98
Source: ABS Catalogue Number 5206.0 and Treasury.
2001-02
2005-06
2009-10
12
4
Distribution of unemployment
across the country
Dispersion
Sep-98
Sep-03 (start of
mining boom)
3
Jun-11
Mar-08
Average unemployment rate
2
4.0
4.5
5.0
5.5
6.0
6.5
7.0
7.5
8.0
Note: Each point on the scatter plot represents the weighted average and weighted standard deviation of regional unemployment for a particular
quarter between Sep-1998 and Jun-2011. The weighted average unemployment rates for all SLAs differ slightly from those estimated in ABS 6202.0.
Source: DEEWR Small Area Labour Market database and Treasury.
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The Macroeconomic and Structural
Implications of a Once-in-a-Lifetime
Boom in the Terms of Trade
David Gruen
24 November 2011
Back pocket
15
Mining and non-mining investment
7
Per cent of GDP
Per cent of GDP
6
7
6
Non-mining
5
5
4
4
3
3
Mining
2
2
1
1
0
2001-02
2003-04
2005-06
Source: ABS Catalogue Numbers 5204.0, 5625.0 and Treasury.
2007-08
2009-10
0
2011-12
16
Gross national saving and investment
Australia
NZ
US
Japan
Germany
UK
France
Italy
Canada
OECD average
G7 average
Per cent of GDP
Gross National Saving
(2001-2005)
(2006-2010)
21
24
19
16
15
14
27
26
21
24
15
14
20
19
20
18
22
22
22
21
20
20
Investment
(2001-2005)
(2006-2010)
26
28
23
22
19
18
23
22
18
18
17
16
19
21
21
21
20
23
22
22
20
20
Notes: Average over the specified period. Australian data are on the new System of National Accounts (SNA) 2008 basis, while other data uses the
SNA93 and therefore may not be fully comparable due to changes in savings and investment measurement methodologies, although the differences
appear small. New Zealand data are only to 2009.
Source: IMF World Economic Outlook, September 2011.
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