Australia’s current account fell into a $4.9 billion deficit in the first quarter of 2024, a significant $7.6bn drop from the previous period, primarily due to a reduced trade surplus and an increased net primary income deficit, according to the latest ABS figures.
“The current account deficit reflects a smaller trade surplus, driven by a rise in the imports of goods, while the net primary income deficit increased,” said Grace Kim, the ABS head of international statistics.
The balance on goods and services fell by $6.1bn to $17.8bn. Concurrently, the net primary income deficit saw an increase of $1.5bn, reaching $22.3bn.
Despite a modest quarterly rise of 0.2% in terms of trade, there was a notable annual drop of 7.3%. This was influenced by a steeper fall in import prices compared to export prices.
“The prices of goods exports fell, led by metal ores prices, after a rise in the December quarter,” Kim said in a media release. “The price of exported goods was 10.3% lower compared to this time last year.”
On the import side, goods increased by 4.5%, led by consumption goods including medicines and clothing, while imports of services dropped by 1.8%, ABS data showed.
Exports of goods declined by 1.5%, impacted by decreased domestic production of coal and iron ore. However, exports of services rose slightly by 0.6%, buoyed by increased travel services due to major music events.
The financial account displayed a robust surplus of $8.3bn, driven by significant net inflows of equity, which were partially offset by net outflows of debt.
Australia’s net international investment liability position reached its lowest point since June 2009, showing a reduction of $103.9bn.
“The narrowing of Australia’s international investment liability position reflected a large rise in Australia’s foreign equity assets as Australian investors benefitted from rising values in international share markets,” Kim said.
The net foreign equity asset position escalated to a record high of $505.5bn.
ABS said the $5.5bn fall in net trade is anticipated to detract 0.9 percentage points from the GDP growth of the March quarter, signalling potential economic challenges ahead for Australia.
For more details, read "Balance of Payments and International Investment Position, Australia, March 2024".
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