Sunday, February 23, 2020

Australian Economy Essay Example | Topics and Well Written Essays - 2000 words - 3

Australian Economy - Essay Example Figure 1 - Historical real GDP growth in Australia's economy The Australian economy is expected to see a rise of between 3.75% and 4% in the GDP for the 2011-12 fiscal year. However certain estimates see this prediction as too high given the current global economic climate (Reserve Bank of Australia, 2010; Brinsden, 2010). The figure below speaks volumes of the success of the Australian government and the Australian Reserve Bank in keeping the Australian economy afloat (Australian Government, 2010; Reserve Bank of Australia, 2010; Bureau of Economic Analysis, 2010). Figure 2 - Comparison of international GDP growth rates The GDP of any nation is composed of the consumption (C), the investment (I), the net governmental fiscal spending (G) and the net exports (X – Q) which can be expressed mathematically as: Australia’s response to these components can be used to better delineate the response of the Australian government and the Australian Reserve Bank to deal with the ch allenges in the wake of the global financial crisis. Consumption can be used as a major indicator of the economic situation. Australia saw an increase in retail spending of around 0.8% by volume between June 2009 and 2010 which indicates greater consumer confidence (The Australian Bureau of Statistics, 2010). However there is little denying that the global financial crisis made Australian consumers all the more conservative (Gruen, 2010) as the household savings rate went up by 1.3% by May 2010 (Reserve Bank of Australia, 2010). Given that consumption growth alone is responsible for 1.5% of the growth of the Australian GDP, it serves as an important sector. The GDP also witnessed a boost in investment especially in the mining sector although the government’s new tax on mining was expected to prohibit further growth. The mining industry witnessed a growth in investment of 29% between June 2009 and 2010 which was around 50% more than expected (Pascoe, 2010). As an initial respo nse to the global financial crisis the government spending shot up dramatically but this was slowed down fearing: overstimulation of the economy; crowding out of private investment; placing a large debt burden. The GDP was positively supported by the net exports as the current account deficit first fell and then went into a positive trade surplus. The increase in net exports can be seen to result from increased demand for Australian minerals in the South East Asian market. Moreover contribution from net exports is expected to rise in 2011 as new capital investment is lowered into mineral operations that will remove bottle necks that affect production capacity (Stutchbury, 2010). The policies and approaches adopted by the Australian government since 2008 have been directed at handling the impacts of the global financial crisis. Macroeconomic policies have been specifically designed and geared to minimise damage from the global financial crisis. Moreover another chief aim of these pol icies remains the provision of adequate exit strategies that would be implemented once economic stability is seen on the horizon. The current fiscal stance of the Australian government is more towards contraction as the budget deficit for 2010-11 was some 40.8

Friday, February 7, 2020

Finance and risk management,Shipping finance Essay - 1

Finance and risk management,Shipping finance - Essay Example Financing the ship industry has always evolved with the prevailing market conditions. More investment has always been required in the industry above the owner’s potential to finance hence the need for banks. The industry has its strengths and weaknesses, there have been opportunities, and it has also seen threats. This paper examines the relationship between shipping financing and shipping markets, the major sources of capital available in the shipping industry, the strengths and weaknesses, opportunities and threats (SWOT) in the industry. The shipping industry represents a substantial percentage of the world trade. The industry is one of the most effective forms of transport and the costs are relatively low. It costs 11 percent and 20 percent of the transportation cost on roads and rails respectively. If the business is doing well it can have a high capital return of about 25 percent per annum ( Nizam and Ghanem 15). Shipping industry is also a dynamic industry; there is continual investment in research and development of new technology. This contributes to the global technological growth. This industry is cyclical and relies on the changes of the global market. This makes the industry to be uncertain. The industry also experiences a shortage of skilled labour and management because there are few people who are professionals in this field. The image of this industry is poor; people tend to perceive the industry to be archaic and therefore outdated. Vessels also cause pollution of the environment through emission of CO2 and noise. There are initiatives to make ships more environmentally friendly. This will make ships more acceptable. There is also a long term plan to recruit, educate, and train skilled seafarers. This will close the gap pertaining to lack of skilled labour. There is an initiative to improve propulsion technology of ships through building bigger ships, nuclear powered ships,