| I’m Malcolm Scott, international economics enterprise editor in Sydney. Today, we’re looking at Australia’s fading economic strength and its upcoming federal election. Send us feedback and tips to ecodaily@bloomberg.net. And if you aren’t yet signed up to receive this newsletter, you can do so here. Australians are usually seen as a sunny bunch living in a land of relative prosperity. But that’s not been the case for the last couple of years, where heavily indebted households seem to have missed out on the post-pandemic recovery seen elsewhere. Sure, things look OK at the headline level — the economy is growing and unemployment remains historically low at 4.1%. But look under the hood and things look bleaker. Headline growth has been fueled by a rapid acceleration in immigration, which is exacerbating a chronic housing shortage. A lot of the jobs growth has happened in the care economy where productivity tends to be low. As for mining wealth, that tends to spread unevenly through the economy. From the start of 2023 to late 2024, gross domestic product on a per-capita basis declined in Australia at a time when the average of OECD economies was steadily climbing. To put it bluntly: While Australia wasn’t in recession, its people were. So you’d think Prime Minister Anthony Albanese’s ruling center-right Labor government would be on track for a beating at the upcoming May 3 election, right? Wrong. Much like in Canada, Albanese’s electoral fortunes have received a shot in the arm from Trump and his America-First agenda of tariffs and upheaval. Albanese’s opponent, ex-cop Peter Dutton, had been touting policies such as cutting back on civil servants and forcing them back to the office. That’s allowed Albanese to paint Dutton’s center-right Liberal-National Coalition as a bunch of Trump wannabes — and the polls have swung back in the government’s favor in recent weeks. But it’s not game over just yet. There are 22 seats held by Labor, minor parties and independents on a margin of less than 5%. If the Liberal-National Coalition can scoop up most of those, Dutton will be in a position to form government. The latest polling suggests that’s unlikely, but as political events the world over have shown us over the past few years — never say never. Whatever the outcome — a Labor majority win, an unlikely outright Coalition victory, or minority government formed by either — the winner will face increased pressure to deliver policies that can revive the nation’s stalling growth engines. “Australia should be an optimistic country, open to the world, globally competitive,” Ken Henry, a former treasury secretary, wrote in an opinion article last month. “To secure that vision, we need an economic policy transformation. Kicking the policy reform can down the road simply won’t do it.” The Best of Bloomberg Economics | Executive orders. Trade wars. Elon Musk and DOGE. Trump’s second term has been nothing short of eventful. Bloomberg reporters recap his first 100 days in a Live Q&A on May 1 at 11 a.m. EDT. Tune in here. Read more: Net foreign direct investment into a swathe of Asian economies turned negative last year — the weakest outcome since 2012, back when the euro zone was in crisis and the US was still emerging out of the Great Recession. The -0.1% of GDP net FDI figure for India, Indonesia, Malaysia, the Philippines, South Korea, Taiwan, Thailand and Vietnam is due in part to a pickup of outbound FDI by the group’s domestic companies, according to ANZ Bank. But at its heart, the weak performance reflects a stagnation in global trade flows relative to economic output, the bank says. “Asian economies will need to work harder to create and support ecosystems to attract FDI,” ANZ economists Dhiraj Nim and Bansi Madhavani wrote in a note Monday. “Policy focus must shift to supporting factors such as research, intellectual property, labor skills and export infrastructure.” | 
