economic overview 2004 world facts and statistics

World Facts

Economic Overview
December 2004
By Faye Mallett

To mark the end of the year, the Galt Global Review is featuring the current economic overviews in the US, Canada, Australia and the UK, with predictions by leading analysts for what we can expect in 2005.

Sources for this feature include:

The 2004 Index of Economic Freedom http://www.heritage.org/research/features/index/countries.html
The Economist http://www.economist.com/countries/
International Monetary Fund http://www.imf.org/
Global Insight http://www.globalinsight.com/
Statistics Canada http://www.statcan.ca/start.html
Australian Bureau of Statistics http://www.abs.gov.au/
National Statistics (UK) - http://www.statistics.gov.uk/
U.S Department of Commerce - http://www.commerce.gov/
The British Chambers of Commerce http://www.chamberonline.co.uk/
Organisation for Economic Co-operation and Development http://www.oecd.org/home/
The CIA World Factbook http://www.cia.gov/cia/publications/factbook/geos/us.html#Econ

	Canada	US	Australia	UK
Population	32,040,292	295,078,467	20,233,728	60,100,000
GDP	$958.7 billion	$10.99 trillion	$571.4 billion	$1.666 trillion
GDP per capita	$29,800	$37,800	$29,000	$27,700
GDP growth rate	3.2%	3.5%	3.2%	3.2%
Revenues	$348.2 billion	$1.782 trillion	$185 billion	$688.9 billion
Expenditures	$342.7 billion	$2.156 trillion	$181 billion	$746.1 billion
Major Exports	Automobile products, machinery and equipment, energy products, forest products, agricultural products, travel services, insurance services, computer and information, transportation	Industrial supplies, consumer goods, automotive goods, food & beverages, travel services, financial & insurance services, computer & information	Coal, crude petroleum, iron, ore, aluminium, machinery, financial services, insurance, travel services	Manufactured goods, oil and other fuels, food, travel, travel services, financial and insurance services, transportation, computer & information
Exports of Goods & Services	$316.3 billion	$1.08 trillion	$104.5 billion	$348.9 billion
Major export trading partners	US: 84.8% Japan: 2.4% UK: 1.4%	Canada: 23.2% Mexico: 14.1% Japan: 7.4% UK: 4.8 %	Japan: 18.6% US: 9.7% South Korea: 8.3% China: 7.0% New Zealand: 6.6%	US: 15.2% Germany: 11.8% France: 10.0% Ireland: 8.2% Netherlands: 7.5%
Major imports	Machinery and equipment, automobile products, travel services, financial services, insurance services	Crude oil, refined Petroleum products, automobiles, consumer goods, industrial raw materials, financial & insurance services	Passenger motor vehicles, aircraft & parts, computers, medicaments, travel services, financial services, insurance	Finished manufactures, semi-manufactures, food, oil, financial services, communications
Imports of goods and services	$219.8 billion	$1.6 trillion	$127 billion	$391.3 billion
Major import trading partners	US: 71.5% Japan: 3.3% UK: 2.9%	Canada: 18.1% Mexico: 11.6% China: 10.8% Japan: 10.4%	US: 18.1% Japan: 12.3% China: 10.1% Germany: 5.7% UK: 4.6%	US: 13.7% Germany: 11.3% France: 8.5% Netherlands: 6.8%

Source: Index of Economic Freedom 2004 & The CIA World Factbook, Statistics Canada, Australian Bureau of Statistics, National Statistics (UK) and the U.S
Department of Commerce

CANADA

Canada is the world’s seventh largest market economy and is
ranked 16 in the 2004 Index of Economic Freedom (published by
The Heritage Foundation and The Wall Street Journal).

According to the Canadian 2004 Economic and Fiscal Update on November 16, Canada is in very good economic condition compared
to other large industrial countries. The economic performance looks solid and Canada's fiscal position is forecasted to continue to
improve.

GDP growth is forecasted at 3.0% for 2004 and 3.2% for 2005, job growth remains strong and the unemployment rate of 7.3% is
expected to improve.

In 1998, Canada's total government debt burden was the second highest among G-7 countries. This year it will have the lowest. The
IMF calls Canada's fiscal position "the most favorable among G-7 countries."

The Bank of Canada considers the economy to be running near capacity.

Canada has a well-diversified economy, with the services sector accounting for over two-thirds of the country’s output and providing employment

for three quarters of the population. The primary (resource) sector plays an important role in the economy as well, as it makes up over one-quarter of the country’s total exports and is the main source of income in several provinces.

Canada is highly integrated with the US economy, which absorbs 85% of its exports (nearly $4 billion per year), thus making the US – Canadian economic relationship the largest that has ever existed between two countries. Since the establishment of NAFTA (North American Free Trade Agreement), the two-way trade between Canada and the US amounts to $1.5 billion per day (Source: 2004 Index of Economic Freedom).

Improvements need to be made, however, to improve truck routes and increase the flow of trade across the border. Given the difficulties currently experienced by truckers in this critical aspect of Canada's economy, actions need to be taken to improve Canada’s competitiveness.

Higher interest rates, increased oil prices and an appreciated Canadian dollar are all factors which may restrain economic growth in the coming months. However, the positive effects of high commodity prices and strong employment gains should be enough to keep the economy growing at a solid pace.

Employment	16.1 million
Labour Force by Occupation	19,731,984
GDP	0.93%
GDP per capita	$528 billion

UNITED STATES

The United States has a powerful, diverse and technologically advanced economy.

U.S. firms are near the forefront in technological advances, especially in computers and medical, aerospace and military equipment and its financial services and media and entertainment sectors are exported all over the world.

As the primary growth engine for the global economy, the US is considered one of the world’s most advanced economies and is ranked number 10 in the 2004 Index of Economic Freedom.

The US is self-sufficient in most raw materials, with the notable exception of oil. Leading industries include motor vehicles, aerospace, telecommunications, chemicals, electronics and computers.

The end of 2004 places the US in a stronger position than predicted. According to Reuters, the economy has expanded at rates exceeding 3 percent for the past six quarters and seems positioned to keep growing. The White House has estimated that GDP will expand 3.5 percent

in 2005, a rate that economists consider "trend growth" that keeps unemployment from rising.

Low interest rates, productivity improvements, higher profit levels and a lower U.S. dollar are all factors for the current economic growth, with employment up 0.9% and the unemployment rate declining to 5.4%. “Consumer spending has been increased by exceptionally low interest rates and a booming housing market,” states The Economist.

According to Global Insight analysts, the “current global economic recovery in 2004 owes almost all of its impetus to two regions of the world—North America and Asia-Pacific.”

Although 2004 was a growth year for both the US and global economies, the strong global performance “masks pockets of considerable weakness around the globe, particularly in the Eurozone, Japan, and many parts of the Third World.” (Global Insight)

Analysis’s predict that, with the US economy not getting much help from the rest of the world, global growth will be based on a narrow and weak foundation over the next several quarters, meaning world growth will continue to rely on an over-extended American consumer.

Employment	140.3 million
Labour Force by Occupation	farming, forestry, and fishing 2.4%, manufacturing, extraction, transportation, and crafts 24.1%, managerial, professional, and technical 31%, sales and office 28.9%, other services 13.6% note: figures exclude the unemployed (2001)
Participation Rate	62.5%
Average Weekly Earnings	$531.82

AUSTRALIA

Australia is the world’s largest coal, iron ore and alumina exporter as well as being a major supplier of agricultural products, minerals, metals, and fossil fuels.

Like most developed countries, the services sector generates the
bulk of the GDP, the largest service industries in Australia being finance, property, and business services. Although mining and agriculture are small in terms of GDP, they account for a large share
of exports.

Australia has recently enjoyed an era of economic expansion, productivity growth, and low inflation. As the world economy slowed dramatically in late 2000 and 2001, Australia kept on growing rapidly, leading all major industrialized economies in GDP growth.

According to the Dow Jones, the Australian economy will slow next
year as the higher Australian dollar and a �pull back in housing investment depresses growth.�

But while growth looks set to slow, few are expecting the economy to get worse.

The volume of exports is forecast to grow 6.0% in 2005 compared
with 4.6% growth this year, while import growth is expected to slow
to 4.3% from over 13% this year.

Australia is working to secure a future free-trade deal with the Association of South East Asian Nations (ASEAN), which is expected to take at least another year to negotiate. Currently it’s major import and export trade partners are Japan, China, South Korea, New Zealand, Germany and the US.

Economic growth remained strong for the first half of 2004, then more than halved in the third quarter to its slowest pace in almost four years, states Bloomberg.com, because the rising currency cut exports and home building declined.

Continued growth is expected in 2005 and 2006, however, with improving net exports offsetting the projected weakening in household consumption, according to the OECD.

The fifth-biggest economy in the Asia-Pacific region will expand 3 percent in 2005, according to Australian government forecasts. That's lower than the September forecast of 3.5 percent because of higher oil prices, the nation's rising currency, a continuing drought and slower global economic growth.

Employment	9770.7 (�000)
Labour Force by Occupation	agriculture 5%, industry 22%, services 73% (1997 est.)
Participation Rate	63.7%
Average Weekly Earnings	960.00

THE UNITED KINGDOM

The United Kingdom is in its longest interrupted economic
expansion since World War II, with levels of growth averaging about
2.8 percent over the past decade. The country still faces uncertainty similar to other industrialized nations of the world, but is the best performing country in the Eurozone.

The United Kingdom is one of the leading industrial nations of the world, and over the last quarter of the 20th century the U.K. economy has benefited from privatization of industry, free market policies and
the development of its oil and gas sector, the largest in the EU.

The U.K. is a mature, industrialized market economy with a declining traditional manufacturing sector but a diverse, fast-growing services sector led by banks and insurance companies and emerging technology companies. The services sector now accounts for two-thirds of the GDP, with the financial and business services sectors
as a whole accounting for over 70% of the GDP.

The major concerns facing the country are long-term manufacturing productivity, education and imbalances between the manufacturing and services sectors. Literacy rates for workers are also below
those of the major EU economies, but this factor does not seem to
be affecting the competitiveness of the UK’s service industries, which are both world class and fast growing.

According to the British Chambers of Commerce, UK economic performance has been “very satisfactory in recent years – with good growth, low inflation and strong job creation.”

Growth is set to slow towards trend in 2005, yet there is no risk of recession and UK growth is still set to remain the highest in the Eurozone. A current problem is that weaker Eurozone performance will “exacerbate global imbalances and worsen the problems facing UK exporters.” (The British Chambers of Commerce)

The Bank of England predicts that economic growth will slow to 2.5 percent in 2005 from 3.2 percent this year.

In the introduction to the Fourth Quarter 2004 forecast, David Frost, Director General, British Chambers of Commerce emphasises the need for government to place the interests of wealth-creating businesses at the forefront of its economic strategy.

The UK economic imbalances are less severe than previously thought, however.

Manufacturing output is staging a recovery of 1.1% growth and 2004 has been the strongest year for global and UK economic growth since 2000. Due to the geo-political threats to the economy, a slowdown is anticipated for the next 1-2 years, with major economic imbalances hindering global growth in the next few years.

Employment	74.7%
Labour Force byOccupaption	farming, forestry, and fishing 2.4%, manufacturing, extraction, transportation, and crafts 24.1%, managerial, professional, and technical 31%, sales and office 28.9%, other services 13.6% note: figures exclude the unemployed (2001)
Average Weekly Earnings	N/A

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