Major export markets—Better business climate; weaker growth
Of Australia’s largest 20 emerging market (EM) export destinations, all improved in absolute terms in the World Bank’s latest ease of doing business gauge, bar South Africa. Despite inherent methodological limitations, this signals a more conducive set of regulations to enhance business activity.
Not only most improved, cracking the top 100 for the first time, India is also Australia’s fastest growing export market, with the IMF predicting an economic expansion of 7.4% in 2018. However, progress has not been uniform—for instance, the time taken to enforce a contract has increased to 1,445 days, relative to 1,420 days 15 years ago, placing India in 164th place out of 190 economies. The OECD average is 578 days. Other countries that made strides include Thailand (to 26th), Saudi Arabia (to 92nd), and Vietnam (to 68th). Despite more marginal gains, the UAE was the star performer (21st).
Improving business conditions offset the expected slowdown in Australia’s top EM export destinations—driven by China’s engineered ‘soft landing’. Overall, when weighted by the scale of exports in 2016, aggregate GDP growth is expected to slow to 5.95% in 2018 (from 6% in 2017).