Australia's economy is expected to grow steadily in the next few years due to soaring infrastructure spending and strong export of resources, but trade tensions and falling house prices will be significant obstacles.
Economic analysts forecast Australia's gross domestic product will grow by 3.2% in 2018, up from 2.9% in July, according to a Reuters poll on October 3-10. Australia's economy has reached 1 trillion and 850 billion Australian dollars (US $1 trillion and 300 billion).
The upgrade reflects an unexpectedly strong economy in the first half as consumers, exporters and the government jointly boosted annual growth to a six-year high of 3.4%.
Australia's population is growing at a rate of 1.6% a year, twice the average growth rate in rich countries, supporting economic expansion. Population growth will boost infrastructure spending.
Analysts expect growth of 2.8% in 2019 and 2.7% in 2020, which will set the Australian economy for a remarkable 29-year period without a technical recession.
However, this will largely depend on China's success in breaking away from trade conflicts with the United States. China is Australia's largest single export market, but also a key factor affecting many Australian resources prices.
"Australian exports are more closely related to Chinese domestic demand than manufactured goods export supply chains," said Paul Bloxham, chief Australian analyst at HSBC.
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