New areas of commerce have been created in eastern Asia, particularly in Japan, to counteract the sharp decline of the traditional European markets. Recent high deficits in the balance of trade have been caused by fluctuation in world demand and competition from the European Union. However, the Australian economy is growing again as it emerges from recession. Wool exports are improving and sugar production is expanding, despite a severe drought in Queensland in 1994. Unemployment is declining, although interest rates have remained high to guard against inflation.
Tourism is now Australia's biggest revenue earner.
It showed massive growth during the 1980s and, although the rate of increase has slowed, the Olympic Games, to be held in Sydney in 2000, will provide an important boost - the event is expected to attract an additional 1.5 million visitors.