Australia now ranks as the sixth most important destination for international investment, new QIC data has revealed.
In a recent analysis comparing the world’s 50 largest economies in terms of demographics, economic activity, debt and governance, Australia’s overall ranking is behind only Norway, Ireland, Arabia Saudi Arabia, Sweden and Denmark.
“This puts us well ahead of many of our advanced economy peers who are our most likely competitors for foreign capital,” said Matthew Peter, QIC’s chief economist.
Indeed, Australia outperforms major economies such as the United States, which ranks 20th, as well as New Zealand, the United Kingdom, Switzerland, Germany and Canada.
According to Peter, the country’s popularity as an offshore investment opportunity will only grow.
“By 2050, we will rise to fourth place in the general ranking, behind the Scandinavians: Norway (which retains its first place), Sweden (2nd) and Denmark (3rd). »
The QIC explained that Australia’s strong performance is reflected in its top 10 ranking in key areas: 8th in demographics, 9th in economic activity and 10th in governance.
Peter added: “Our weakest performance is in the debt imbalance category, where we rank 15th in 2023, increasing by just one position, to 14th place in 2050.”
In terms of demographics, Australia has the highest population growth rate in the world at 2.4 percent, matched only by Nigeria, which translates to a population growth rate of 2.9 percent. working age population.
“Our strong population growth rates translate into good outcomes for economic activity, particularly for an advanced economy,” Peter said.
Additionally, Australia’s trend employment growth rate of 1.9 percent is more than twice that of the global average and that of the United States, which is 0.8 percent. .
According to the chief economist, this supports a strong trend rate of growth in Australian GDP, which is currently estimated at 2.3 percent, outpacing that of the United States and Canada, as well as advanced economies in Asia and of Europe.
“Looking ahead to 2050, Australia’s relatively strong population growth allows us to maintain our strong economic growth, with trend GDP growth falling to just 2.2 per cent. »
Regarding Australia’s lower rating on debt imbalance measures, QIC said its position was weighed down by its net foreign debt, which stands at 32 per cent of GDP.
“This offsets a favorable public debt position, where gross public debt represents only 55 percent of GDP, which is significantly lower than the global average of 85 percent. Australia’s ranking improves only slightly to 14th by 2050.”
While acknowledging that Australia’s debt imbalance is an area where Australia can improve, Peter reiterated that the country’s fundamentals still compare favorably to those of the world’s 50 largest economies.
“Strong demographics, economic activity and governance make it a sought-after destination for international investors, now and in the future,” he said.
