Lead Story
Issue No. 48 - August/September 2009
Right Future
by Professor Richard Blandy
Unlike Europe and North America, South Australia’s position will improve as Asia regains its historical ascendancy, according to economic authority Professor Richard Blandy. We’re spluttering our way to recovery, but Prof Blandy says SA’s economy will grow fast during the next 20 years.
SA’s Economic Outlook, June 2009
Using the Federal and State Budgets it is possible to put together the following table, drawing in particular on an important article by Michael Stutchbury, Economics Editor of The Australian.
Growth expectations for SA’s Gross State Product mirror the expectations for Australia’s Gross Domestic Product. The SA Budget papers also say the Department of Treasury and Finance expects the unemployment rate in SA to broadly follow the course of the national rate.
SA, like Australia, is expected to be in recession in 009-10, to recover in 2010/11, to show significantly bove-trend economic growth in 2011-12 and 2012-13, as well as above-trend economic growth in the following our years. Generally speaking, above-trend growth from 2011-12 to 2016-17 is expected to recoup the economic output lost during below-trend growth in 2008-09, 2009-10 and 2010-11.
Trend economic growth in Australia is regarded as being about 3%pa. Trend economic growth in SA is regarded as being about 2.75%pa – slower than in Australia as a whole because population, labour force and employment growth are expected to be slower in SA.
Labour productivity growth is expected to be about 2%pa in both SA and Australia as a whole. A surprise is SA’s comparatively strong economic showing in 2008-09 (compared with Australia as a whole).
As the Australian Treasury notes, the expectation economic growth in 2011-12 will be 4.5% is conservative.
Early economic-recovery growth rates are typically faster. It would not be surprising if economic growth in both 2010-11 and 2011-12 were faster than shown in Table 1. However, the high economi...
