More Good News for Australia

I'm a little late on this one, but the World Economic Forum released its 2009 Financial Development Report in October.  The United States, which was #1 in the rankings last year, has slipped to #3 this year, behind the UK and -- surprise!-- Australia.

Australia was #9 last year, but its relatively strong banking sector and economy have boosted it way up the list this year.

How much does it matter that Australia is doing well? Australia isn't an extremely large economy.  With a GDP of just over $1 trillion (exchange rate basis), it is the 14th largest economy, just after Mexico.  That means that stronger demand in Australia has limited ability to help out the world economy.  However, it is likely that Australia's economic strength is fueled by China's demand for the resources that Australia exports.  And China, a much larger economy, has more scope to boost global demand.