Key global insights

Queensland’s Budget 2024-25 highlights stronger than national-average economic growth and nation-leading jobs growth, while identifying challenges including unprecedented population growth and global inflationary pressures. The budget includes significant cost of living relief and estimates a net operating surplus of $564m in 2023-24 and a deficit of $2.63 bn in 2024-25. Exports are expected to grow in real terms by 10.5% in 2023–24 off the back of growth in thermal coal, LNG, metals, beef, and services exports. A 2.5% increase is forecast in 2024-25 driven by a rebound in metallurgical coal exports and services growth.

The EU is expected to impose a 20-30% tariff on Chinese-built EVs, significantly higher than the existing 10% tariffs on imported cars. Research suggests a 20% tariff could see the volume of imported cars from China fall by $4 billion USD. China has signalled it could respond with tariffs of up to 25% on imported cars, which could impact German automakers like Mercedes-Benz and BMW who have a strong presence in China. This development reflects the ongoing rise in protectionist trade policies.

China has consolidated its position as Queensland’s largest goods export destination, with $25.1 bn exports in the 12 months to April 2024 (an increase of 23.6%). It comes off the back of China lifting its ban on Queensland coal in January 2023, with coal exports rising $5.2 billion. The growth of exports to China comes as Prime Minister Anthony Albanese announces an upcoming visit by Chinese Premier Li Qiang – the first such visit since 2017 in a further sign of improving relations between the countries.

The Department of Agriculture and Fisheries and Infarm developed an AI camera system to monitor cattle health. It has recorded over 750,000 images and 86,000 videos to train the AI, which will eventually become remote surveillance nodes detecting issues and sending alerts. This system demonstrates AI's potential to enhance efficiency and productivity in various industries. A recent McKinsey survey shows 72% of organizations regularly use generative AI.

The European Central Bank (ECB) has cut interest rates for the first time in five years, lowering the deposit rate by 25 basis points to 3.75% from last year's record 4%. Despite higher-than-expected inflation forecasts, the ECB will base future policy on data, potentially including further rate cuts. Canada has also begun cutting interest rates, while the US has kept rates on hold. Falling rates overseas could increase consumer demand for Queensland exports and drive capital inflows in Australia.

The UK and EU have altered the Windsor Framework to allow Northern Ireland imports of meat products from Australia to be covered by the UK's tariff-free quota. The alteration will help contribute to the flow of trade between Australia and Northern Ireland and open new export opportunities for Queensland companies. Since the introduction of the Australia-United Kingdom’s FTA, Queensland’s meat exports to the UK have grown significantly since, with beef exports growing 215% so far this year. 

China’s Chang’e-6 lunar lander successfully touched down on the far side of the moon. The Chang’e-6 probe landed in the South Pole-Aitken Basin, where it will begin to collect samples from the lunar surface, the China National Space Administration announced. Sunday’s landing comes as a growing number of countries, including the United States, eye the strategic and scientific benefits of expanded lunar exploration in an increasingly competitive field.

Featured insights

Inflation Reduction Act driving critical minerals FDI inflows

  • The World Bank says the Inflation Reduction Act (IRA) has re-directed US Foreign Direct Investment (FDI) towards countries with Free Trade Agreements (FTA) with the US.
  • Countries with a US FTA saw greenfield FDI inflows into Energy Transition Minerals (ETM) increase ten-fold, compared to a five-fold increase in non-FTA countries.
  • The IRA provides tax incentives for clean energy vehicles manufacturers using minerals sourced from US FTA countries.
  • Queensland’s deposits and access to critical minerals including Vanadium, Cobalt, Indium, Chromium, Titanium, Graphite, Tungsten, Antimony and Rhenium mean the state is positioned to benefit from Australia’s FTA’s and ‘strategic competition’ policies.

Global Election Highlights

  • Populist parties made significant gains in European Union elections, although the centre-right European People’s Party (EPP) remains the largest bloc. The shift to the right may see a stronger focus on security and competitiveness (which could benefit Queensland’s defence sector), but halt climate action progress.
  • French President Emmanuel Macron has called a snap election after the far-right National Front secured twice as many votes as his centrist Renaissance Party. 
  • Claudia Sheinbaum has become Mexico's first female president after securing the highest vote percentage in Mexico’s democratic history. Sheinbaum has proposed an agenda of constitutional reform. 
  • Donald Trump, the Republican presidential nominee, has been convicted of 34 criminal fraud charges. Despite this, he remains ahead in national polls. It is unclear what a Trump presidency could mean for Australia’s relationship with the US and key partnerships including AUKUS and the Quad. 
  • Narendra Modi has been sworn in as India’s Prime Minister for a third term but failed to secure a majority. India is expected to remain a key security partner with the US as part of the Quad with Australia and Japan.
  • Following the death of President Ebrahim Raisi last month, Iran's Guardian Council has approved six Presidential candidates - most of them hardliners.