Qld and WA were on similar growth paths, but Qld got knocked off by GFC

This month’s RBA chart pack contains a nice, informative chart depicting State shares of Australia’s GDP (see below). It shows that, up until the financial crisis in 2008, Queensland, like WA, was increasing its share of national GDP, but stalled as the financial crisis hit the Queensland construction sector hard (particularly when people realised the extent of over-investment in the boom years) and also suppressed domestic tourism. And it got worse as the dollar went back above parity with the US dollar, killing any chance of a recovery in international tourism. Relative to Queensland, WA has benefited from a much larger resources boom and from being less dependent on tourism and hence less exposed to the adverse impact of a high exchange rate.


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