Australia has solidified its position as a leading destination for international investment, according to a recent report from the QIC, as part of the company’s ambition to collate and analyse data to shed light on the relative attractiveness of countries across the globe as investment destinations. The country’s stable economy, transparent regulatory environment, and strong growth prospects have attracted significant foreign capital across various sectors.
In the past year, Australia has seen a notable increase in investments from international institutions, particularly in infrastructure, real estate, and technology. This trend reflects global investors' confidence in Australia’s economic resilience and its ability to provide long-term returns.
The report highlights that Australia’s commitment to maintaining an open investment climate, combined with its strategic location in the Asia-Pacific region, makes it an attractive option for investors seeking opportunities in emerging markets. Furthermore, government initiatives aimed at enhancing infrastructure and fostering innovation are expected to drive further investment.
The research focused on four categories:
Demographics. Currently, Australia has the strongest population growth rate in the world at 2.4%, equalled only by Nigeria. This translates into an equal high growth rate of 2.9% growth in population of working age, again with Nigeria. However, Australia’s population and working age population growth rates are projected to drop sharply over coming decades to just 0.9% and 0.8%, respectively in 2050, as our population ages. Importantly, compared to most other countries, our population growth rates continue to outperform. By 2050, it is projected that global population growth will have fallen to 0.5% (from 0.9% currently), with only Nigeria (1.5%), Pakistan (1.2%) and Egypt (1.0%) having higher growth rates than Australia.
Economic activity. Our strong population growth rates translate into strong scores on economic activity, particularly for an advanced economy. Currently, our trend employment growth rate of 1.9% is more than twice that of the global average and US rates of 0.8%. This supports a strong trend growth rate in Australian GDP, which is currently estimated to be 2.3%, compared to US and Canada at 2.1%, and advanced economies in Asia and Europe of around 1.5%. Looking forward to 2050, Australia’s relatively strong population growth enables us to hang-on to our robust economic growth, with trend GDP growth falling to just 2.2%. In contrast, the North American trend GDP growth rate drop to 1.5%, while the advanced economies of Europe drop to 1.0% and the advanced Asian economies drop to an abysmal 0.5% trend growth rate.
Governance. Australia’s 9th rank in governance owes to an 7th ranking on “ease of doing business”, behind New Zealand, Singapore, Denmark, Hong Kong, Norway and Sweden, and our 8th ranking on “corruption perception” behind, Denmark, New Zealand, Norway, Singapore, Sweden, Germany and Ireland.
Debt imbalance. Australia’s weakest rating is in its debt imbalance measures, where it currently ranks 15th with a slightly negative debt imbalance index score. Australia is weighed down by its net foreign debt position, which sits at 32% of GDP. This offsets a favourable public sector debt position where gross government debt is just 55% of GDP, which is significantly lower than the global average of 85%. Australia’s ranking improves only marginally to 14th by 2050. Clearly, Australia’s debt imbalance ranking is an area in which Australia has scope to improve.
Looking ahead, Australia is well-positioned to continue attracting foreign investment, bolstered by its strong economic fundamentals and favorable business conditions. As the country further integrates into global supply chains, it is likely to benefit from ongoing international interest in its diverse investment landscape.
