Australia's economic performance depends on the world prices of mineral and agricultural commodities. The value of Australia's currency can considerably affect the value of export earnings. Australia has also managed to steer clear of recession and sharp fluctuations in the rate of inflation during the past 2 decades. Government policies of the 1990s, including allowing the value
|Exchange rates: Australia|
|Australian dollars (A$) per US$1|
|SOURCE: CIA World Factbook 2001 [ONLINE].|
of the currency to fall, deregulating industry, and encouraging foreign investment, allowed Australia to weather the Asian economic crisis of that decade. In this period, inflation was low, averaging between 1 to 3 percent per year. Inflation is a controversial topic among economists and is still not clearly understood. However, within the past 2 years price increases in Australia have been attributed to the introduction of the Goods and Services Tax (GST) of 10 percent on most products and services; the fall in the value of the Australian dollar, which makes imports more expensive; and the increase in world oil prices, which are passed on to Australian consumers. Nevertheless, steady economic growth of around 4 percent per year has characterized the greater part of economic performance.
Australia has an established stock exchange. The Australian Stock Exchange (ASX) opened in 1987 through the merger of smaller, very well established (100 years or so of trading) exchanges. In 1998, there were 1,162 companies listed on the exchange.