Australia is an outstanding producer of primary products. The nation is self-sufficient in almost all foodstuffs and is a major exporter of wheat, meat, dairy products, and wool. Australia usually produces more than 25 % of the world’s yearly output of wool. The volume of manufacturing grew rapidly between the 1940s and 1970s, and mining became a leading area in the economy during the 1960s. The value of exports from the mining and manufacturing sectors now exceeds that of the agricultural sector. In 1998 the around annual federal budget included $87.9 billion in revenues and $88.5 billion in expenditures. Gross domestic product, which measures the value of all goods and services produced, was $404 billion in 1999.

Australia's accomplished world reputation is that of a valuable, underpopulated nation prone to natural disasters, “riding on the sheep's back,” and otherwise heavily dependent on foreign investment. That was a reasonably fair description during the first century of white settlement, when wool exports reigned supreme. Later, more complex stereotypes added wheat, beef, lamb, dairy produce, and a range of irrigated crops to the list, but the key significance of farming and grazing was unchallenged. The image was essentially shattered by the growth of manufacturing and service industries and particularly by the spectacular developments in mineral exploitation after World War II.

Australia has a prosperous Western-style capitalist economy, with a per capita GDP at the level of the four dominant West European economies. valuable in natural resources, Australia is a major exporter of agricultural products, minerals, metals, and fossil fuels. Commodities account for 57% of the value of total exports, so that a downturn in world commodity prices can have a big impact on the economy. The government is pushing for increased exports of manufactured goods, but competition in international markets continues to be severe. While Australia has suffered from the low growth and high unemployment characterizing the OECD countries in the early 1990s and during the recent financial problems in East Asia, the economy has expanded at a solid 4% annual growth pace in the last five years. Canberra's emphasis on reforms is a key factor behind the economy's resilience to the regional crisis and its stronger than expected growth rate. Growth in 2001 will depend on key international commodity prices, the extent of recovery in nearby Asian economies, and the strength of US and European markets.