Australia facing financial meltdown

Five charts that show why Australia is facing financial MELTDOWN

UNEMPLOYMENT in Australia is rising and economic growth is slowing with experts fearing the country is about to go through a significant downturn.

UK Express,

7 August,2015

Resource-rich Australia has benefited hugely from the exponential growth in China's economy in recent years, by supplying the raw materials that has powered the Asian boom.

In line with the rise in supplying China, Australia switched from an economy making its own goods to one that digs materials out of the ground.

Mining as a percentage of Australian GDP has jumped to 8.6 per cent, while manufacturing has steadily dropped.

But now the colossal Chinese economy is slowing down and, as Australia's top export destination, the abating is expected to have a big impact.


China accounts for more of Australia's export




Australian mining and manufacturing as a percentage of GDP

Amid reduced demand for commodities, prices have fallen sharply in recent months, which dents export earnings for Australia.

Almost 60 per cent of Australia's exports to China are of Iron Ore, according to RBS. And the metal's price of has plummeted by around half over the past year. 
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The price of Iron Ore has fallen

Furthermore, the property market, which looks to be a bubble, is a looming threat.

House prices in Australia have rocketed in the past few years of the economic boom and many believe it could be in for crash.

Analysts has said the market "appears overvalued and vulnerable".



Australia's household debt looks worrying

The result is a toxic mixture of high debt that could be easily become unravelled if unemployment continues to rise.

The amount of people out of work has already increased over the past three years and the jobless rate stands at 6.3 per cent, its highest level since around 2002.



Australia's unemployment is rising

In a note to investors yesterday, RBS said it sees worsened conditions ahead for Australia.

The report added: "An economy geared towards commodities and mining, highly exposed to China and with a leveraged housing market, Australia appears fragile and exposed to increasing downside risks."