Proximity to Asia’s powerhouse economies
Australia benefits from Asia’s prosperity. In 1981, Asia accounted for just 21% of global GDP with this share expected to reach 45% by 2026. Most of Australia’s principal export partners are located in Northeast and Southeast Asia. A network of 18 free trade agreements gives Australian companies preferential access to these fast-growing markets. Asia’s middle class is growing strongly with an anticipated 3 billion consumers by 2030. This will trigger increased demand for Australia’s top exports:
- resources and energy
- agriculture
- education
- tourism
- healthcare services.⁴
1.The bar represents the value of regional gross domestic product at current prices based on purchasing power parity.2.The Association of Southeast Asian Nations (ASEAN) includes Brunei Darussalam, Cambodia, Indonesia, Lao PDR, Malaysia, Myanmar, Philippines, Thailand and Vietnam. To avoid double counting with newly industrialised economies (NIEs) and ASEAN, Singapore was excluded from the ASEAN group.3.NIEs: Singapore, Hong Kong SAR, Korea and Taiwan.4.Brookings Institution, see source below.
F =Forecast
International Monetary Fund, 2024, World Economic Outlook April 2024; Brookings Institution, 2017, The unprecedented expansion of the global middle class; Austrade.
Foreign investment reaches A$4.7 trillion
Australia is a standout destination for global investors. Since 2003, the stock of Foreign Direct Investment (FDI) in Australia has risen by an average of 7.1% each year. Other forms of foreign investment – including portfolio investments – have grown by 8% per year. This strong growth has resulted in the value of foreign investment in Australia reaching A$4.7 trillion. Confidence in our economy means Australia has bucked global trends. When FDI in Australia surged by 9% in 2022, the total stock of global FDI dipped by 6%. Over the past 2 decades, foreign investment has had a growing role in Australia’s economy. As a percentage of GDP, the stock of foreign investment has grown from 129% in 2003 to 181% in 2023.
Other investment is the balance of total investment less direct investment. As such, it represents portfolio investment, financial derivatives and other investment categories from Australian Bureau of Statistics (ABS) source data.
ABS, 2024, Balance of payments, Table 15; ABS, 2024, Australian national accounts: national income, expenditure and product, Table 3; United Nations Conference on Trade and Development, 2024, Data Centre – Foreign direct investment: Inward and outward flows and stock, annual; Austrade.
More about global ties & open markets
Chapter 4 in the Benchmark Report provides further data and insights into global ties and open markets.
Why Australia Benchmark Report
Discover why Australia is a great investment destination.
