Another huge current account deficit, coming in at around 7.2 per cent of GDP. And that’s with high commodity prices and low world interest rates, thanks to the ‘global savings glut’. Put commodity prices back to normal, and interest rates up by a couple of percentage points, and we could easily be running a deficit in excess of 10 per cent of GDP. At that rate, net overseas obligations would be in excess of 100 per cent of GDP within five years.
Australia has been called a miracle economy on the strength of an impressively long, but by no means unique, economic expansion. But if we manage sustain this kind of imbalance for another five years it really will be a miracle. As far as I know, no economy has ever managed anything like it.