Australian annual economic growth

Economic growth amid global weakness

The Australian economy has remained resilient over the past year despite a weak world economy and the most extensive drought in Australian meteorological records. While the economy should continue to grow in 2003-04, the pace is likely to be a little below trend.

Australian economy solid, despite global concerns

Australia's economy is set to record its thirteenth year of sustained annual growth in 2003-04 following a solid outcome for 2002-03.

Economic growth this year is expected to be around 3 per cent. This solid outcome looks likely despite global economic weakness and one of the most severe droughts in a century.

Economic growth is forecast to be 3¼ per cent in 2003-04. This should be underpinned by solid productivity growth and moderate employment growth. Farm production should make a large contribution to growth if the drought breaks, as expected.

Business investment should also make another solid contribution to economic growth, increasing the economy's capacity to grow in the future.

Solid employment growth and moderate real wage increases should continue to support growth in household income.

The unemployment rate is likely to remain steady, at around 6 per cent.

Inflation should remain moderate, further supporting economic activity. Inflation is forecast to be around 2¼ per cent through the year to June 2004.

Despite the positive outlook, the difficult international environment poses significant risks to Australia's growth prospects.