Though the main downside risks to the Australian economy include a greater than expected fall in commodity prices and a larger than projected rise in inflation, Australia has more reasons to be cheerful.

What sort of peculiar capitalist country is this in which the workers' representatives predominate in the upper house…and yet the capitalist system is in no danger?

When Creative Paper Tasmania, the largest handmade papermaking mill in Australia, announced, in 2005, that it was officially launching `roo poo paper', they never expected that the announcement would generate unprecedented interest among the people at home and abroad. Roo poo paper, as the name implies, is paper made from kangaroo's dung. Joanna Gair, Manager of the company, who was immediately inundated with an impressive number of bulk and individual orders for the paper and contacted from around the world for interviews and orders, could not hide her glee then: "It's just so funny, as well as it being the eco-message which we try to get across; there's a real giggle factor as well," she would say of the unique paper that had captured the imagination of the people. "It's made out of poo, but also it's so Aussie." Of course, there is something certainly unique about this `Aussie spirit', be it in the way they play cricket or take themselves—gung ho, sprightly, in-your-face—made famous by the Foster's ad, featuring a few true blue Aussie fans rooting for their national team with the chant, "Aussie, Aussie, Aussie, Oie, Oie, Oie!"

Likewise, there is also something unique about the situation that the Australian economy finds itself in now. While the economy is currently experiencing unprecedented gains in terms of trade, it is also feeling the pressures of inflation, which has been on the rise following an increase in domestic demand. As a commodity producer, Australia's terms of trade have risen considerably, bringing in benefits from higher resource prices. This has had an expansionary impact on the economy, increasing the size of money supply and consequently the aggregate demand. In short, unlike other developed nations, Australia is beset by a problem of different kind: tackling inflation that is gradually rising as a result of the presence of strong expansionary forces in the economy and the growth in domestic demand.

Analyst Magazine, Australian Economy, Commodity Prices, Economic Growth, GDP Growth, Gross Domestic Product, GDP, Global Growth, Australian Manufacturing Sector, Agricultural Sector, Agricultural Resources, Global Repercussions, Australian Growth Momentum.