Economic Analysis of Canada and Australia - Case Study Example

Student’s Name: Instructor: Course Code: Institution: Date the Assignment is due: Economic Analysis of Canada and Australia Introduction A multi-faceted analysis of economic activity in Canada and Australia will reveal a very interesting scenario. Summarily, both countries have posted perpetual growth in the last five decades. Australia performed better than Canada in the last few years when reviewed from the point of view of productivity growth of the overall economy. Nonetheless, this growth was equally influential to the economic indicators of each nation, such as standards of living, national trade balances, employment opportunities etc. There are a host of differences and similarities in the economic trends and features in both of these nations. That forms the central theme of this paper. The paper attempts to derive conclusive comparison parameters from existing multivariate analysis and statistics. It must be noted that the paper does not seek to report on the economic situation of either nation, rather the objective here is to compare the reported economic conditions of both nations. The specific items of comparison used include, national output and expenditure, the external sector, the fiscal policy and government finance, the monetary sector, the macroeconomic development and economy stability, policy responses and future outlook as well as the prices, wages and employment statistics in each nation. The key sources of these data are provided for at the end of the paper. Most of these sources are quarterly reports, IMF publications, World Bank reports, five economic year reports of each nation and corporate estimates arrived at via statistical techniques. Though the element of variation and or error in various reported estimates cannot be ruled out, the paper attempts to research, authenticate and rigorously ferret for all the estimates used in the comparison. The Similarities between Australia and Canada Up-Close In a majority of economic studies of North America, the Canadian economy is mostly compared to that of the US. Indeed, comparisons for these two nations have more or less become the research staple of economic comparisons. In this paper however, we extend the scope of analysis to Australia. This should be an interesting study since; both Australia and Canada are relatively small countries in population tally, suggesting equal economies of scale. Australia’s population is around 20 million today, as compared to Canada’s 30 million. Secondly, the two nations have a very comparable gross Domestic Product. In 2001 for example, the GDP of Australia was US$ 27,300 compared to that of Canada at $28,900. Not only does this indicate similar rations of revenue generation and expenditure but also a great similarity in living standards of the people in both nations. Australia and Canada both reflect similar or near similar economic structures with their economies having very comparable economic priorities and interests. For instance, both are net importers of production technology such that transportation equipment and machinery constitutes half of their total imports. Interestingly, the bulk of this high technology equipment is imported from the US in both nations. Bothe Canada and Australia have abundant natural resource bases such that their primary sector structures are overly dominated by natural resource tapping. For instance, 55% of all Australian exports in the last nine years since 2001 have been raw materials tapped from within the nation’s resource base. This can be compared to 46% of all Canadian exports. Another key and non-negligible similarity to note for purposes of this comparison is that, both Australia and Canada adopt a similar statistical system mainly based on productivity performance. The countries have integrated their productivity programs with their national account systems. It is thus very easy to determine growth and the sources of such growth in both economies. Productivity is determined by labor productivity, labor utilization, capital-labor ratio, labor composition etc. All these factors are essential in the comparison of their economies. a) National Output and Expenditure In considering national output and expenditure, the core concept in use must be the GDP and all its components. As a comparative measure, national output and expenditure aggregates the national economic activity yielding a specific unduplicated production value of one, the total income that arises from production and two, the total expenditures incurred to yield that production. To do this, let us determine the pectoral production of both countries production (that is the production of the five sectors of the economy namely persons, corporations, unincorporated businesses, non-residents and government). Canadian current account deficit in overall transactions with trading partners from the rest of the world marginally narrowed to US $9.8 billion in 2009. This reflected a largely energy-led export increase of consumer goods. It was worth noting however, that the Canadian current account deficit scenario has lasted for the last five quarters. This resulted after an almost 10 years run of current account surpluses (Statistics Canada). Similarly, the Australian trade terms have featured a current account deficit in the last 50 years. Most experts attribute this trend to a narrow export base featured by the Australian economy. The performance of the Australian current account was at -5.5% in 1990, -4.3% in 1996 and back again to -5.7% in 2008. The GDP of Canada was in 2008 contributed to by three major sectors namely, agriculture with 2%, industry with 28.4% and services with 69.6%. This is then compared to Australian sectoral output of agriculture at 3.4%, industry at 26.8% and services at 69.8%. Income and expenditure accounts have for long been used by Canadian and Australian authorities as the foundation of policy formulation and macroeconomic analysis. The Canadian national sectoral income rose with 1.5% during the last two quarters of the 2008/2009 fiscal year, as compared to 1.1% rise in the first half of the same year. This is a picturesque feat mirrored by the Australian economy with a 1.7% rise in the last half of 2008/2009 fiscal year and 1.3% in the first half. Individual income in Canada rose with a 2.1% last year, compared to a 2.3% rise in Australia. The same trend was notable in the previous three years. For the public non-financial investment funds, the Canadian economy reported a net US $2.2 billion during the last quarter of the 2009 fiscal year, while the Australian economy reported a net US 2.3 billion in the same period (Reserve Bank of Australia). The private non-financial corporations had a net output of US $24.1 billion offset by a net equity gain of US $20.8 billion in Canada. In Australia, the net output was at US $ 19.9 billion offset by a net equity gain of US $22.3 billion. Last year, the national government general output averaged at a quarterly decrease of US $8.3 billion in Canada and a quarterly increase in Australia of US $3.1 as compared to the same period in 2007/2008 fiscal year. In 2009, the financial turmoil that encroached the globe affected both nations to an extent but not adversely. The Canadian economy was more negatively affected than that of Australia. The real exports of Canada for instance, fell by 17.5 percent compared to the annual rate of the previous five years while that of Australia fell by 8.4%. Canada however, reregistered an external current account balance deficit, the first in 10 years (Bank of Canada). Australian current account was less severely hit though. This situation reverberated in the domestic consumer demand trends with Canadian households registering a 17% reduction of expenditure while Australian households registered a 18% reduction. There was a registered falling of commodity and asset prices with Canadian GDP declining in the fastest rate recorded since 1991. Australian GDP held at a steady rate by decreased earning counterbalanced by a reduction in spending on the overall. In consumption trends, the sectors that have exhibited most growth in Australia include the food, financial services, beverages, beauty, fitness care and tourist products. Australian have a very distinct consumer behavior marked by substantially liquid assets, high living standards and a strong, increasing demand for value added consumer products from North America, Asia and Europe. Consequently, Australian’s saving trends are marginal with investments from saving constituting only 6% of the net investments in 2009. Basically, Australians are usually attracted by healthy, wholesome products and are thus prepared to pay higher prices for such goods. The national production cannot fully cover these consumer needs and the trend has aggravated the receptive attitude of imported products in the country. According to Parham (2002), the leading purchase decision factor is the price for most Australians. In this, most consumer profile studies and purchasing power analysis conclude that Australian consumers have a tendency of being big spenders. As such, their purchasing power averages at a particularly high level today, having grown by 43% in the 18 years (from 1991 to 2009). This is enabled by a higher per capita income which in 2008 was 20% higher than that of the French. To fund the increasingly expensive consumer behaviors, the Australian household debt has also been on the rise. Nonetheless, OECD concludes that the high domestic consumption is what sustains the Australian economy growth. The consumer credit recourses in Australia indicate that most Australians usually resort to credit funding such that the household debt rate is today one of the rare economic indicators worrying analysts in the country. Younger generations are particularly fond of excessive debt and dismal savings such that they have perpetuated the Australian culture of heavy borrowing. This scenario is also comparable to that of Canada. The Canadians most promising consumer industries are telecommunications, fair trade products such as shoes, coffee and clothing, IT, organic products, natural healthcare products, pharmaceutical products, tourism and leisure. Canadian’s consumer behavior is among the most environmentally conscious in the world. Environmental impacts of overconsumption have taken a central point in determining consumption trends in Canada today. Towards this end, consumers in Canada inspect quality of each product, verify its origin and inspect its composition long before they consider its price. Nonetheless, Canadians are still excessively influenced by advertising and are thus inclined to purchase the most trendy and fashionable products. When it comes to consumer profiles and the purchasing power, Canadians' living standards are among the highest in the world today, higher even than those of Australia. Over the last five years, the purchasing behavior of Canadians has been changing, especially among the young adults. Research indicates that the core objective of most young adults is to complete their studies, purchase a home and bear children. This objective is then punctuated with numerous leisure activities. Finally, Canadians usually care about what they eat than Australians, and most usually result to natural, organic and health foods. Australians and Canadians are alike in their preference for consumer credit recourses such that most long term goods (Cars, furniture etc) and services are usually bought on credit. In Canada, the single most common credit form is cash loans usually granted for normal retail purchases and paid for in monthly installments. b) Prices, Wages and Employment In Australia, the most significant inflation of price in five years was experienced in the last one year, particularly in the last quarter of 2009. Notably, the prices of fruits appreciated with a +15.9%, the domestic holiday accommodation and travel costs appreciated with a +6.6%), beer appreciated by +2.1%, the built houses purchase prices appreciated with +1.0% while residential rent rates appreciated with a +1.0%. Conversely, the price inflation as per the 2009 consumer index illustrated a significant offsetting by price falls in automotive fuel with -2.8%, in audio, computing and visual equipment with a whopping -7.1% and then in pharmaceuticals with -5.3% decrease. In general, Australian consumer price index in 2009 had a 0.5% rise during the last quarter as compared to the earlier half of 2009, which had a 1.0% rise. When compounded, the Consumer Price Index had an average annual rise of about 1.3% in 2009 (The World Fact Book). The unemployment rate in Australia has been at 5.3% in the last five years, as compared to 8.5 % for Canada (Bank of Canada). In the same duration, Canadian average weekly wages including overtime rose to US $ 837.08 up with a 2.8% increase from the levels reported in December 2004. This can be compared with the rather steady weekly wages in the Australian economy with a marginal 0.9% raise over the same period (Reserve Bank of Australia). c) The External Sector In the Current Account Balance, Canada had US $ 36.32 billion in 2009 thus ranking as number 185 in the world (Bank of Canada). This can then be compared with US $33.31 billion for the Australian economy in 2009, thus ranking Australia as number 184 in the world (The World Fact Book). In external debt, Australia netted US $920 billion as at 31st December 2009 making it the 11th country in the world. This is an increase in external debt since the country had US $799.8 billion of debt as at 31st December 2008. Canadian external debt stood at US $833.8 billion as at 30th June 2009 ranking the nation as the twelfth in the world, compared to an external debt of US $781.1 billion as at 31st December 2008 (Statistics Canada). In exchange rate movements, the Canadian dollar (CAD) has been variably appreciating and depreciating against the US dollar over the last five years in an up and down movement. In 2009, the CAD exchanged with the US dollar at 1.1548. The same can be compared with 1.0364 in 2008, 1.0724 in 2007, 1.1334 in 2006 and 1.2118 in 2005. The Australian exchange rates have been consistently losing out to the US dollar. The Australian dollars (AUD) exchanged with the US dollar at 1.2894 in 2009, at 1.2059 in 2008, at 1.2137 in 2007, at 1.3285 in 2006 and at 1.3095 in 2005. Last year (2009) saw Australian export performance decline with a net export value of US $161.5 billion making it the 22nd country in the world. This can be compared with a US $189.9 billion earning in 2008. The main exports commodities included coal, gold, iron ore, meat, alumina, wool, wheat, transport equipment and machinery. This were exported to a host of export partners including Japan (22.2%), South Korea (8.2%), China (14.6%), India (6.1%), NZ (4.3%), US (5.5%) and UK (4.2%). A greater decline in export earning was exhibited by the Canadian economy in 2009, averaging at US $298.5 billion as compared to US $459.1 billion in 2008. But Canada managed to be the 12th country in the world based on the export volume. The core exports commodities included industrial machinery, motor vehicles and motor vehicle parts, aircraft, chemicals, telecommunications equipment, plastics, wood pulp, fertilizers, timber, natural gas, crude petroleum, electricity and aluminum. These were traded with the main export partners such as the US (77.7%), the UK (2.7%) and Japan (2.3%). In import performance, Canada reduced its spending on imports to US $305.2 billion in 2009 as compared to US $415.2 billion in 2008. In 2009, Canada ranked as the 13th biggest importer in the world with the major imports commodities being machinery, equipment, motor vehicles, motor vehicle parts, crude oil, electricity, chemicals and durable consumer goods. These were mainly imported from US (52.4%), Mexico (4.1%) and China (9.8%) (The World Fact Book). On the other hand, Australia also reduced her import expenditure to US $160.9 billion in 2009, from US $194.2 billion in 2008, making it the 21st largest importer in the world. The core commodities imported by Australia included transport equipment, machinery, computers , office machines, crude oil, petroleum products, telecommunication parts and equipment. These were imported from China (15.4%), Japan (9.1%), US 12 (1%), Singapore (7%), Thailand (4.5%), Germany (5.1%), UK (4.4%) and Malaysia (4.1%). That yields a trade balance of US $0.6 billion gain for Australia in 2009 and negative US $6.7 for the Canadian economy in the same year. This can be compared to 2008 when Australia had a negative trade balance US $4.3 billion as compared to a US $43.9 gain for the Canadian economy. As evident from the above data, Australia is laboring to reduce import expenditure while Canada has actually been spending more in imports. Canada\s import and export partners are mainly the UK and the US while Australia has ventured more into the Asian market (more stable in the prevailing economic situations) to compliment her trade with the western nations. In Tourism, both countries experienced a decrease in arrivals in 2009, standing at a 12% reduction in Australia and 26% in Canada. Canadians also reduced their international travel by 18.7% while Australians reduced their international travel by a mere 6%. The two countries however differed in terms of transport services where Canadians increased their domestic travel therefore increasing the revenue generated from transport services with a 9.3% while the revenue of Australian transport services fell by 0.19% in 2009. In a bid to secure greater international trade, both Canada and Australia have signed numerous trade agreements with many nations across the world. Canada is however far ahead in this arena when compared to Australia as can be seen from the following examples. The Canadian government has signed more than 16 international and national agreements in the last three years in a bid to eliminate any trade barriers and facilitate cross-border trade, thereby increasing the investment opportunities and potential for the Canadian business. Examples of such trade agreements include the Agreement on Internal Trade (AIT), which was signed by the Federal Government and Canadian Provinces; the new North American Free Trade Agreement (NAFTA), which was signed between Canada, USA and Mexico; World Trade Organization Agreement on Government Procurement (WTO-AGP), which was signed by 34 nations worldwide etc. The NAFTA specifically for instance, formed the largest trade area in the world, bringing unsurpassed economic growth in the three nations besides amplifying the living standards of the nationals. Other Canadian trade agreements of recent times include the Jordan Free Trade Agreement (2009), the Canada - Colombia Free Trade Agreement (2008), Canada - Peru Free Trade Agreement (2009), Canada - European Free Trade Association (2009), Canada - Costa Rica Free Trade Agreement (2002), Canada - Chile Free Trade Agreement (1997) and the Canada - Israel Free Trade Agreement (1997). The same trend is notable in Australia. For instance, Australian government signed the Australia - United States Free Trade Agreement in 2004 to create a typical larger cross border market reach without border restrictions. For the last 15 years, the Australian Government has shown increasing supports for negotiations in comprehensive Free Trade Agreements. In all the trade agreements, Australia has maintained requirements consistent with World Trade Organization guidelines and rules so as to reinforce and complement her multilateral trading system towards greater foreign exchange income (Government of Canada). Existing free trade agreements have promoted external trade revenues for the Australian investors and exporters, since the removal of trade barriers always allow businesses to into key world markets. Like Canada, Australia has thus amplified the speed of setting up trade liberalization agreements via regional and multilateral processes. Currently the functional free trade agreements in Australia include such nations as New Zealand, Singapore, Thailand, US, Chile etc. the Australian government is currently in ongoing trade negotiations with China, Japan, Korea, Malaysia as well as several African and South American countries. d) Fiscal Policy and Government Finance The Canadian government revenues in 2008 stood at US $514.5 billion against an expenditure of US $547.2 billion. This marked a national budget deficit of US $ 32.7. In Australia, the budget featured government revenue of US $323.6 billion against an expenditure allocation of US $358.4 billion (The World Fact Book). This marked a national budget deficit of US $34.8 billion in 2009. The average revenue for both countries in the last five years has been US $533.7 and US $351.1 for Canada and Australia respectfully. Australia has exhibited great benefits in the last five years from its largest terms of trade ever in 60 years. Nonetheless, the recent global financial crisis severed the global demand levels and thus reversed some of these gains. Terms of trade fell by 13.25% in 2009 leading to large deficits in government revenue earning thus weakening the fiscal position. The same transpired in Canada, with a 11.6% reduction of revenues and thus severing the fiscal position to a considerable extent (Government of Canada). In both countries, we have an element of vertical and horizontal fiscal imbalance. For instance, average government revenue collected from Australian the provinces in the last five years, has been distributed to individual provinces at a rate of 48%. That means that 52% of provincial revenues are spent without the particular province. Similar, Canada intergovernmental transfers have been put in place to address the great horizontal and vertical fiscal imbalances that existed previously in the traditional fiscal policy (OECD). The national programs support has severed equalization efforts of the government expenditure such that most states only receive 50.3% of their revenue and the rest is entrusted to the commonwealth government. In the last five years however, both governments have enacted policies aimed at altering the Commonwealth Government expenditure patterns so as to achieve specific economic objectives. Canadian fiscal policy displays a greater equity in distribution of the revenues than Australia since almost all states have a share of the federal revenue and in most cases; some states have earned more from the revenues than the federal government (Australian Bureau of Statistics). The Canadian financial markets are relatively stable now, perhaps reflecting strong supervision and regulation exemplified by the Australia market. The Australian financial market is further stabilized by many federal structural factors. Canadian banks and all their securities transactions operations have recently been subjected to rigorous and ferreted consolidated supervision by the OSFI with such regulation as a limit on leverage, a target capital rationing and the Basel standards being enforced (IMF). In government debt, Australia has been reducing the amounts of debt owed over the last eight years. While the net government debt was 10.5% of the GDP in 2002, it fell to 9.4% in 2003, 8% in 2004, 8% in 2005, 6.7% in 2006, 5.9% in 2007, 5.8 in 2008 and 5.6% in 2009. A similar scenario has been featured by the Canadian economy, although Australia was always lower in debt than Canada. Actually, by 2008, Canadian government debt was the lowest in all G8 nations. According to OECD, Canada's government debt percentage to the GDP was at 19.5% in 2009. This is a phenomenal decline in debt since in 1995; Canada’s government debt was the second highest in the G8. As at June 2008, the net foreign debt owed by the Australian public sector stood at US $12.1 billion. This is comparable to the net foreign debt owed by the Australian private sector, which stood at $317.6 billion. A huge percentage of the public sector debt in Australia consisted of government securities issued to the domestic market. In contrast, Canadian public sector debt was US 99.3 billion compared to Canadian private sector debt of US $473.3 billion. e) The Monetary Sector The two nations exhibited a great effect on their monetary sectors consequent to the global financial turmoil of last year. The Lehman collapse especially affected the Canadian monetary market that the Australian one, although both had great liquidity limitations. According to the Australian Bureau of Statistics, the Australian forex market has in the last five years been very liquid, even with limiting occasions like maximum risk aversion of the global depression when firms restrained from spending and preferred cost saving measures such as unpaid dividends. Every time that there has been a liquidity reduction in Australia, the Reserve Bank has always mitigated in the monetary sector in a bid to maintain a constant exchange rate. As already noted, Canadian monetary sector had been appreciating for several years before the global financial crises hit and severed liquidity to an all time high of seventeen years. Recovery has however been achieved in the sector today to a very large extent. The Australian central bank discount rates were at 3.75% in 2009, making the country to rank at number 114th in the world in terms of high discount rates. This was a decrease from the 2008 rates, charged at 4.25%. The Australian reserve bank administrated a cash rate target that saw most commercial banks adopt a prime lending rate of 8.91% in 2008, making the country rank as the 85th in regards to commercial lending rates. This was another decrease as compared to the 2007 commercial banks lending rate of 10.02%. In the stock market, Australia recorded US $298.5 billion in 2007 and approximately US $332.5 billion in 2008. The stock of quasi money in Australia for the 2007 year was at US $667.2 billion while the stock of domestic credit in the same year stood at US $1.312 trillion. The market value of the publicly traded shares in Australia was the 13th highest in the world at US $1.298 trillion in 2007 as compared to US $1.096 trillion in 2006 (Australian Bureau of Statistics). Comparative data on Canadian monetary markets were as follows. The Canadian central bank discount rates were at 1.75% in 2008 making the country the 112th in the world in terms of high rates (OECD). This can be compared to a discount rate of 4.5% in 2007. The cash rate target saw commercial banks impose a prime lending rate of 4.73% in 2008 as compared to 6.1% in 2007. In 2008, Canada was the 136th highest commercial lending rates nation in the world. In the stock market, the Canadian market traded US $356.2 billion in stocks in 2008 making the country the 5th largest stock market trade in the world. This can be compared to US $ $391.6 billion traded in 2007. The Canadian stock of quasi money stood at US $1.299 trillion in 2008, making the country the 5th largest stock quasi money market in the world, as compared to US $1.381 trillion recorded in 2007. The stock of domestic credit was US $2.335 trillion in 2008, ranking the Canadian stock domestic credit market as the 9th largest in the world today. Canadian stock of domestic credit was at US $2.382 trillion in 2007. The market value of all publicly traded shares in Canada stood at US $2.187 trillion in 2007, which is the 7th largest volume traded in the world as compared to US $1.701 trillion traded in 2006. f) Macroeconomic Development and Stability Canada responded very proactively to worsening global economic outlooks of the last one year. To begin with, the Canadian fiscal stimulus that was incorporated in 2009 budget ameliorated the downturn. The Bank of Canada has taken an aggressive monetary policy easing process to mitigate the deflation risks. Today, the Canadian financial system is very stable and measures are already in place to expand the financial stabilization towards future challenges (International Monetary Fund). According to the Organization for Economic Co-operation and Development (OECD), the same stance was taken by the Australian government. The Australian government equally approached the global financial crises in such a way that helped its microeconomic sectors to weather the storm. The 2009 budget alongside a series of innovative interest rate policies have further tightened the loopholes and common omissions that could have otherwise stalled the economy’s recovery (The Australian Business). Nonetheless, the domestic and external financial indicators such as credit conditions shows that one-third of the total Canadian GDP growth variability will be affected by changes in the U.S. real GDP growth (International Monetary Fund). In fact, unlike Australia, the largest volatility of the Canadian growth, especially in macro-financial conditions index are very dependent on the U.S. real GDP growth (OECD). A normalization and growth of the U.S. economy will thus be key in sustaining economic stability of Canada. Australia has shown a great independence from the US market, mainly because of acquiring most of her trading partners from the Asian market, as already detailed in an earlier section of this paper (Australian Bureau of Statistics). In medium term macroeconomic outlook, Canada is faced by a labor decrease challenge that is threatening to slow down economic. However, with tight labor markets regulation, it is possible to forecast strong immigration trends that will fill the labor gaps in coming years. The rapidly developing economies of Asia have exhibited an increasing demand for raw materials will definitely help to keep the Canadian energy and commodity prices at am elevated level. Again, opportunities created in developing countries and which are continually being exploited by Canadian investors will continue to offer the Canadian economy an important export market. Recent stable inflations depicted by the economy in most sectors will ensure that there is a modest interest rate increment such as will maintain the Canadian dollar at near equilibrium level (current level that is). Most notably, the rising health care demand will also be a challenge to provincial coffers thereby demanding assistance from the federal government in coming years. In the Australian case, the 2010 prospects are optimistic in outlook. The 2009 slow down may be a thing of the past since unlike most of the industrialized world, Australia has already stabilized from the turbulent economic times. The high unemployment threat is no longer tenable. The most confronting challenges that face the Australian economy is regulation and standardization of the financial markets. A robust financial sector is projected by many experts as the next area of growth in the Australian economy. Maintaining a constant growth and overcoming the deficit in the current account continue to be a priority concern for Australian policy and strategic planners. Nonetheless, the Australian economy rests in the comfort of 1.2% in the 2008-09 financial years, a time when most economies went on a downward spiral. There is great promise in this year’s attainment. The Australian labor market is also very resilience, and has maintained a remarkable decline in unemployment even with the global depression effects. The 2009 unemployment rate of 5.3% is the lowest among all advanced economies of the world, with the lone exception of Japan. The greatest advantage working for the Australian economy is the timely fiscal policies coupled by innovative monetary policies that have seen the country benefit from trading partners like US, China and UK while still being independently stable. Economic reform in the public and private sector has historically enabled the Australian economy to grow from strength to strength. The future is thus very promising. Conclusion Australian economy has been referred to as the miracle economy, following a great growth consistency of 1980’s through 1990’s. In many ways however, the Canadian economic performance aptly compares to that of Australia was detailed in the many examples above. The two economies are small (in terms of population) and yet very developed in terms of economic structures. The paper has endeavored to compare the economic activity and status of the two countries objectively, hand picking the most essential economic indicators possible. Conclusively therefore, the two nations compare in most instances, with similar trends being depicted across a broad array of sectors and parameters. Yet in all these similarities, the two economies defer, perhaps in policy administration most, giving Australia an edge in future promises of growth, all conditions with standing. Works cited “2009 Article IV Mission to Canada” International Monetary Fund. Retrieved on 2nd March 2010. From < http://www.imf.org/external/np/ms/2009/030909a.htm >. “Canada's Balance of International Payments” Statistics Canada. Retrieved on 2nd March 2010. From. “Current Credit Market Indicators.” Bank of Canada. Retrieved on 2nd March 2010. From . “Trade Agreements.” Government of Canada. Retrieved on 1 March 2010. From < http://www.contractscanada.gc.ca/en/trade-e.htm >. “Increase in Current Account Deficit.” Australian Bureau of Statistics. Retrieved on 2nd March 2010. From . “Main Economic Indicators.” OECD. Retrieved on 1 March 2010. From . “OECD calls for tighter monetary and fiscal policy “The Australian Business. Retrieved on 2nd March 2010. 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