{
  "title": "Australia: Selected Issues",
  "publication": "IMF Staff Country Reports, March 5, 2020",
  "sourceUrl": "https://www.imf.org/en/publications/cr/issues/2020/03/03/australia-selected-issues-49242",
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  "summary": "This Selected Issues paper investigates the drivers of business investment in Australia, focusing on the non-mining sectors. The paper also identifies aggregate-level drivers for non-mining business investment by looking at long-term trends.",
  "sections": [
    {
      "heading": "Summary and focus",
      "content": "- Investigates the drivers of business investment in Australia, focusing on the non-mining sectors.\n- Identifies aggregate-level drivers for non-mining business investment by looking at long-term trends.\n- Delves into firm-level investment behavior and assesses the role of credit availability and uncertainty in different types of firms.\n- Long-term empirical and simulation-based analyses suggest that global factors such as rising policy uncertainty and weaker commodity prices have been key drivers of the slowdown.\n- In the short term, a renewed escalation in US–China trade tensions could spill over to investment and growth in Australia.\n- Domestic factors are also at play, including domestic policy uncertainty and financial constraints, especially for smaller and younger firms.\n- The pace of product market reforms can also impact business investment."
    },
    {
      "heading": "Major findings on drivers of investment",
      "content": "- Global drivers:\n  - Rising policy uncertainty (global).\n  - Weaker commodity prices.\n  - Potential short-term spillovers from renewed escalation in US–China trade tensions to investment and growth in Australia.\n- Domestic drivers:\n  - Domestic policy uncertainty.\n  - Financial constraints disproportionately affecting smaller and younger firms.\n  - The pace of product market reforms influences business investment outcomes."
    },
    {
      "heading": "Firm-level analysis",
      "content": "- Examines heterogeneity in investment behavior across firms.\n- Assesses the role of credit availability and uncertainty in different types of firms, highlighting greater vulnerability for small- and medium-sized enterprises and for younger firms."
    },
    {
      "heading": "Policy recommendations",
      "content": "- Reduce domestic policy uncertainty.\n- Ease credit constraints for small- and medium-sized enterprises.\n- Incentivize research and development.\n- Continue with product market and tax reforms."
    },
    {
      "heading": "Subjects and keywords",
      "content": "- Subject: Commodity markets, Financial markets, International trade, National accounts, Private investment, Production, Productivity, Terms of trade, Trade policy\n- Keywords: Australia, Commodity markets, CR, Global, intangible investment, investment, investment slowdown, ISCR, Non-mining business investment, panel regression, Private investment, product market, product market reform, Productivity, R&D investment, Terms of trade, Trade policy, uncertainty indices, venture capital\n\n---\n\n Content in this bundle\n\n- Australia: Selected Issues; IMF Country Report No. 20/69; February 6, 2020\n  - Australia: Selected Issues; IMF Country Report No. 20/69; February 6, 2020 (Markdown version){rel=\"alternate\" type=\"text/markdown\"}\n  - Australia: Selected Issues; IMF Country Report No. 20/69; February 6, 2020 (PDF){rel=\"external\" type=\"application/pdf\"}"
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    "Published: March 5, 2020",
    "Series: IMF Staff Country Reports",
    "DOI: https://doi.org/10.5089/9781513536125.002",
    "Investigates the drivers of business investment in Australia, focusing on the non-mining sectors.",
    "Identifies aggregate-level drivers for non-mining business investment by looking at long-term trends.",
    "Delves into firm-level investment behavior and assesses the role of credit availability and uncertainty in different types of firms.",
    "Long-term empirical and simulation-based analyses suggest that global factors such as rising policy uncertainty and weaker commodity prices have been key drivers of the slowdown.",
    "In the short term, a renewed escalation in US–China trade tensions could spill over to investment and growth in Australia.",
    "Domestic factors are also at play, including domestic policy uncertainty and financial constraints, especially for smaller and younger firms.",
    "The pace of product market reforms can also impact business investment.",
    "Global drivers:",
    "Domestic drivers:",
    "Examines heterogeneity in investment behavior across firms.",
    "Assesses the role of credit availability and uncertainty in different types of firms, highlighting greater vulnerability for small- and medium-sized enterprises and for younger firms.",
    "Reduce domestic policy uncertainty.",
    "Ease credit constraints for small- and medium-sized enterprises.",
    "Incentivize research and development.",
    "Continue with product market and tax reforms.",
    "Subject: Commodity markets, Financial markets, International trade, National accounts, Private investment, Production, Productivity, Terms of trade, Trade policy",
    "Keywords: Australia, Commodity markets, CR, Global, intangible investment, investment, investment slowdown, ISCR, Non-mining business investment, panel regression, Private investment, product market, product market reform, Productivity, R&D investment, Terms of trade, Trade policy, uncertainty indices, venture capital",
    "**Australia: Selected Issues; IMF Country Report No. 20/69; February 6, 2020**"
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