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Some basic data [latest]

==Latest GDP growth 2.6%
==GDP growth expected for 06 3.3%
==Industrial Production growth 0.7%y/y
==Unemployment 10.05 5.2%
==trade balance negative $16bn
==Current account negative $43bn
==Budget balance 05 positive 0.9% of GDP

Short news

== GDP growth moderated in 2nd half of 04 reflecting slowing global growth and higher oil prices; exchange rate appreciation; and easing housing markets. Supply side constraints, especially on exports, also contributed to slowing growth
== Growth expected to slow down in 05
== Fiscal position strong, characterized by budget surpluses and low and declining government debt,
== Retirement gets bigger and the part of the working population decreases, making it necessary to increase labor participation; boost productivity, still below U.S. levels; and keep health and pension spending sustainable.
==Over the past decade China has become “the” market for Australian raw materials, particularly coal, gas and iron ore. Its exports to China have grown by an average of 19%yearly since 1999.

A love affair

Australia’s exports to INDIA in 04 of $5.42bn are up 62%year on year largely due to an increase of gold exports which reached in 04 $1.72bn, but even without gold exports are up 17%year on year. The four top export goods are gold $2.87bn up 149% y/y, coal $1.19bn up 13% y/y, copper $409mio up 46% y/y but wool a good for which Australia is famous was with $155mio slightly down. On the other side India’s exports to Australia In 04 grew 15% y/y to $1.12bn with pearls and gems, other textile manufactures, floor coverings, jewelry and crustaceans the main items.

Services are playing an increasingly important role. Australian service exports to India reached in 04 $570mio with education and tourism-related services on the top. Indian students love Australia as Indian enrolments in Australian institutions tripled in the past six years reaching in 03 14,000 As tourists Indians also love Australia and Australian’s tourism sector has the potential to benefit from that strongly. India’s outbound tourism developed in the last six years as travel restrictions and credit policies were eased. India is now Asia’s second largest travel market and one of the fastest growing. In 03 Indian resident departures reached 5.3mio up 14.6%y/y. In the 4 years from 1999 – 2003 the number of Indian visitors to Australia increased 35.6% but for 04 alone Indian arrivals are expected to increase by 76%. y/y.

Other Australian key service sectors with export potential to India include health services, environmental technology, financial services (banking and insurance) and public utilities. Challenges faced by Australian providers include competition from the Middle East and South Asia and lack of infrastructure in India. However as usual challenges may also provide opportunities, especially for suppliers of gas and gas pipeline tech as well as consulting engineers.

Also the Indian entertainment sector is becoming an important market for Australia, particularly film production and services. Reforms in the film sector in India attracted foreign investment and technology. Changing viewing preferences have created greater demand for infrastructure. That’s the reason why Indian film-makers have already begun using Australia as a location; mind you 40 Indian films have been shot in Australia since 1998. Australia is strong in high-quality post-production services, such as editing and sound effects.

Opportunities for Australian producers in India may also exist in leisure services, providing equipment and technology for facilities such as water parks, casinos and amusement parks. Other areas include healthcare like providing medical equipment and services, and mining providing technology, equipment and management expertise.

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