Australia has an enviable Western-style capitalist economy with a per capita GDP on par with the four dominant West European economies. Robust business and consumer confidence and high export prices for raw materials and agricultural products are fueling the economy. Australia's emphasis on reforms, low inflation, and growing ties with China are other key factors behind the economy's strength. Drought and strong import demand pushed the trade deficit up in recent years, although the trade balance improved in 2006. Housing prices probably peaked in 2005, diminishing the prospect that interest rates would be raised to prevent a speculative bubble. Conservative fiscal policies have kept Australia's budget in surplus since 2002. More finance information from Australia:

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