Australia has become the world's 12th biggest economy as it continues to out-grow recession-ravaged parts of Europe. New figures from the IMF confirmed Australia had replaced Spain as the 12th biggest economy as measured by GDP at market exchange rates.
Australia’s Treasurer Wayne Swan said that since the Labour government had come to power in 2007 it had climbed three places. Over that period it had surpassed South Korea, Mexico and now Spain where the economy has shrunk by almost 5% over the past five years. However Mr Swan said the fall of Spain, and the rise of Australia, were closely tied to the economic policies pursued in both countries.
While Spain has made a number of tough decisions over a number of years to try to put its economy back on track, it is currently enduring the economic and human impacts of a deep recession, including unemployment rates of around 25%, he said.
Through targeted measures to support our economy in the face of the worst global recession in 80 years, and keep the doors of Australian businesses open, Australia was able to avoid the destruction of capacity in our economy that comes with a recession, in particular the human cost of high and long-term unemployment.
Despite the Treasurer's upbeat assessment of the economy, there are signs that Australia is struggling as the steam comes out of the mining boom.
Job ads in Australia’s main cities showed a further fall while employment figures expected for Thursday are tipped to show the unemployment rate increasing from its current level of 5.1%.
But Mr Swan said Australia remained in a strong economic position.
We have the enviable combination of solid growth, low unemployment, contained inflation, sound public finances and a large investment pipeline that is delivering greater economic capacity and export volumes, he said.
Clearly there are challenges in parts of the economy, including the high Australian dollar and the continuing impact of global headwinds; however this historic milestone in Australia's economic growth story is something all Australians can be proud of.