Although in Australia the current economic situation may seem bad, it is nothing like as dire are Europe.
There is a new issue. After a long period of surpluses in 2009 the government created significant deficits. These do not seem justified by the small slowdown in economic growth. Any ideas?
Using World Bank Data, many of the Eurozone countries have been running large, structural deficits for years. Australia only went into deficit in 2009.
As a result, Australia’s national debt is small relative to GDP compared with the European nations.
The relative problem can be seen from the growth rates. Australia has yet to go into a full year of recession. That is growth of less than zero.
Neither has growth dipped much below the average for 1998 to 2007.