Australia recorded its sixth straight current account deficit, narrowing to A$14.1 billion in the September quarter 2024, according to the Australian Bureau of Statistics (ABS). This marked a $2.2 billion improvement, despite a declining trade surplus.
Tom Lay, ABS head of International Statistics noted: “The trade surplus fell to its lowest level since June 2018 reflecting continued falls in Australia’s terms of trade.”
“The net primary income deficit narrowed to its smallest level since September quarter 2021 due to a fall in dividends paid by Australian firms to overseas investors.”
Exports of goods dropped 2.3%, as production disruptions hit LNG exports, while iron ore shipments fell in line with global price falls. Exports of services also fell 3%, with education-related travel services leading declines as fewer students arrived for semester two.
Imports of goods fell 2.2%, with reduced fuel imports and lower electric vehicle purchases. Offsetting this, imports of services rose 4.6%, led by increased outbound travel to Europe during the Paris Olympics.
Australia’s terms of trade decreased by 2.5% quarter-on-quarter, largely due to falling iron ore and coal prices.
Meanwhile, the net primary income deficit narrowed by $5.5 billion to $17.3 billion, reflecting reduced outflows from dividends and interest payments alongside record-high income inflows from foreign equity assets.
The financial account reported a $20.2 billion surplus, driven by debt inflows of $47.4 billion, partially offset by $27.2 billion in equity outflows.
Australia's net international investment liabilities also rose $20.6 billion to $716.5 billion.
Mr Lay commented: "This was primarily due to Australia’s net foreign debt liabilities rising by $56.6 billion to $1.3 trillion, reflecting a growth in overseas investors acquisition of debt securities issued by Australian banks.”