Slower population growth in Australia is good for the economy, says bank report

by mfafadmin on July 27, 2016

in Australia

Australia’s population growth has stabilised at 1.4% per annum but this is down compared to the 2.2% recorded in 2008, according to new data.

This is positive news for the nation’s economic outlook, according to the report from investment bank UBS which also shows that fewer immigrants are moving to Australia but more Australians are leaving.

population growthA breakdown of the figures shows that the number of Australians leaving the country has jumped from 256,000 to 306,000 since 2012 while the number of immigrants was down by 10,000 per annum between 2012 and 2015.

The report, which analysed recent data from the Australian Bureau of Statistics (ABS), points out that the population growth rate had fallen from a high of 2.2% in 2008, before the global financial crisis, and a more recent 2012 peak of 1.8%.

The report explains that most of the slowdown in population growth had actually come from increased emigration. ‘Slowing in net migration has been almost entirely due to a pick-up in Australians migrating offshore, with a record 306,000 Australians migrating outbound in 2015, rather than fewer inbound permanent migrants,’ it says.

There was a 10,000 strong fall in the number of immigrants between 2012 and 2015, to 483,000 per annum, but a marked 50,000 strong rise in the number of Australians departing the country and the report adds that a slowing birth rate and slightly increasing death rate due to an ageing population in recent times has affected population growth.

It also points out that Australia’s population growth remains high by international standards, and the stabilisation means it will no longer be subtracting from gross domestic product (GDP) growth as happened in previous years, most notably 2013/2014.

However, once short term student arrivals which are not counted in the population figures are included, Australia is likely to be seeing a renewed GDP boost from population increase as the ABS figures exclude students doing shorter term courses of a year or less.

It also explains that while tourist and business visitors, also excluded from the ABS data, would rarely increase the demand for housing, appliances, utilities and the like, it is more likely short term foreign students staying for a nine to 10 month study course would.

‘This suggests short term students, while not truly ‘population’, could have a more significant positive impact on demand for goods and services in the economy, more akin to the resident population,’ the report adds.

The UBS study also pointed out that a jump in tourist numbers due to the falling Australian dollar is also likely to be providing an economic boost, with a growing number of people now on Australia’s shores at any point in time.

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