Australia Set to Supplant Spain as 12th Largest Economy

Other sharp contrasts can be seen in Spain’s unemployment rate—24.6%, the highest in the European Union and a record for the country since its government moved to a democracy in the late 1970s—compared with Australia’s, which has remained near 5% for 15 months in succession. Spain’s economy also contracted in Q2.

While Australia warns of headwinds hitting the prices of iron ore and coking coal, taking a toll on its terms of trade, it has nevertheless managed to weather numerous economic shocks that have weighed down much of the rest of the world.

According to Michael Blythe, chief economist in Sydney at the country’s biggest bank, Commonwealth Bank of Australia, falling export prices do indicate that some of the “insulation that has protected the economy is fraying.”

Still, Blythe said in the report, “Various global shocks have hit the Australian economy—the Asian financial crisis, the tech wreck, the global financial crisis to name a few. These events would normally tip the economy into recession. But we have bounced through each pothole and come out the other side in respectable shape courtesy of the stimulus from a rising terms of trade.”