Australian Bureau of Statistics

Rate the ABS website
ABS Home > Statistics > By Catalogue Number
ABS @ Facebook ABS @ Twitter ABS RSS ABS Email notification service
5302.0 - Balance of Payments and International Investment Position, Australia, Mar 2014 Quality Declaration 
Latest ISSUE Released at 11:30 AM (CANBERRA TIME) 03/06/2014   
   Page tools: Print Print Page Print all pages in this productPrint All RSS Feed RSS Bookmark and Share Search this Product

ANALYSIS AND COMMENTS


BALANCE OF PAYMENTS


CURRENT ACCOUNT

In original current price terms, the March quarter 2014 current account deficit was $5,283m, a decrease of $8,293m (61%) on the December quarter 2013 deficit.

Current account balances, in seasonally adjusted and trend terms at current prices, are shown in the following table.

BALANCE ON CURRENT ACCOUNT IN CURRENT PRICES - March Quarter 2014

Change in:
Current prices
Current prices
Current prices
$m
$m
%

Seasonally Adjusted

Balance on current account
-5 672
6 034
51.5
Balance on goods and services
3 591
4 200
(a). .
Net goods
6 683
3 691
123.4
Net services
-3 092
508
14.1
Net primary income
-8 781
1 811
17.1
Net secondary income
-482
24
4.7

Trend

Balance on current account
-7 524
2 819
27.3
Balance on goods and services
2 588
2 579
28 655.6
Net goods
5 767
2 294
66.1
Net services
-3 179
285
8.2
Net primary income
-9 622
232
2.4
Net secondary income
-489
8
1.6

. . not applicable
(a) See paragraph 5 of the Explanatory Notes.



VOLUMES AND PRICES

Goods and Services

In seasonally adjusted chain volume terms, the balance on goods and services was a surplus of $15,118m, a rise of $5,315m (54%) on the December quarter 2013 surplus of $9,803m.

The net surplus on goods rose $4,395m (36%) on the December quarter 2013 surplus of $12,342m. Goods credits rose $3,927m (5%) and goods debits fell $468m (1%). The net deficit on services fell $920m (36%) on the December quarter 2013 deficit of $2,539m.

The increase in the balance on goods and services surplus, in seasonally adjusted chain volume terms, is expected to contribute 1.4 percentage points to growth in the March quarter 2014 volume measure of GDP, assuming no significant revision to the GDP chain volume estimate for the December quarter 2013.

GOODS AND SERVICES, CHAIN VOLUME MEASURES (a)
Graph: GOODS AND SERVICES, CHAIN VOLUME MEASURES (a)



Terms of Trade and Implicit Price Deflator

Australia's seasonally adjusted terms of trade on net goods and services for the March quarter 2014 fell 1.2% to 87.1 with an increase of 1.2% in the implicit price deflator (IPD) for goods and services credits and an increase of 2.4% in the IPD for goods and services debits.

In trend terms, the terms of trade for net goods and services fell 0.6% to 87.3.

IMPLICIT PRICE DEFLATOR AND TERMS OF TRADE (a)
Graph: IMPLICIT PRICE DEFLATOR AND TERMS OF TRADE (a)



Goods

The trend estimate of net goods at current prices for the March quarter 2014 was a surplus of $5,767m, a rise of $2,294m (66%) on the December quarter 2013 surplus of $3,473m.

In seasonally adjusted terms at current prices, net goods was a surplus of $6,683m, a rise of $3,691m (123%) on the December quarter 2013 surplus of $2,992m.

GOODS, Price and volume analysis: Seasonally Adjusted - March Quarter 2014

Change in:
Current prices
Current prices
Chain volume measures(a)
Implicit price deflators(a)
$m
%
%
%

Exports
4 664
6.8
5.3
1.4
Rural goods
1 144
11.7
7.3
4.1
Non-rural goods
3 389
6.1
5.4
0.7
Net exports of goods under merchanting
-8
-14.8
-17.0
2.8
Non-monetary gold
139
3.8
-0.7
4.5
Imports
972
1.5
-0.8
2.2
Consumption goods
670
3.3
1.3
2.0
Capital goods
-896
-5.7
-8.4
3.0
Intermediate and other merchandise goods
1 302
4.5
2.6
1.8
Non-monetary gold
-104
-10.1
-14.5
5.2

(a) Reference year 2011-12



Services

SERVICES, Price and volume analysis: Seasonally Adjusted - March Quarter 2014

Change in:
Current prices
Current prices
Chain volume measures(a)
Implicit price deflators(a)
$m
%
%
%

Exports
295
2.1
1.9
0.2
Manufacturing services on physical inputs owned by others
2
28.6
14.3
0.5
Maintenance and repair services n.i.e.
-13
-56.5
-59.1
0.5
Transport
5
0.3
0.6
-0.3
Travel
162
1.9
1.8
0.1
Other services
137
3.2
2.8
0.4
Imports
-213
-1.2
-4.1
3.0
Manufacturing services on physical inputs owned by others
-
-
-
-
Maintenance and repair services n.i.e.
-43
-19.0
-22.3
4.0
Transport
-68
-1.6
-2.2
0.6
Travel
-83
-1.1
-4.6
3.7
Other services
-20
-0.3
-4.2
4.0

- nil or rounded to zero (including null cells)
(a) Reference year 2011-12



GOODS CREDITS

The trend estimate of goods credits at current prices rose $2,703m (4%) to $72,522m in the March quarter 2014.

In seasonally adjusted terms at current prices, goods credits rose $4,664m (7%) to $73,556m, with volumes up 5% and prices up 1%.


Rural Goods

Exports of rural goods, in seasonally adjusted terms at current prices, rose $1,144m (12%) to $10,881m, with volumes up 7% and prices up 4%. The main components contributing to the rise were:
  • cereal grains and cereal preparations, up $485m (22%), with volumes up 22%
  • meat and meat preparations, up $385m (16%), with volumes up 7% and prices up 8%
  • other rural, up $348m (8%), with volumes up 4% and prices up 3%.

Partly offsetting these rises was the wool and sheepskins component, down $74m (10%), with volumes down 12% and prices up 3%.


Non-rural Goods

Exports of non-rural goods, in seasonally adjusted terms at current prices, rose $3,389m (6%) to $58,793m, with volumes up 5% and prices up 1%. The main components contributing to the rise were:
  • other mineral fuels, up $2,074m (32%), with volumes up 18% and prices up 12%, partly due to higher than usual shipments from cyclone exposed ports in a comparatively mild cyclone season
  • metal ores and minerals, up $825m (3%), with volumes up 8% and prices down 4%, largely due to higher than usual shipments from cyclone exposed ports in a comparatively mild cyclone season
  • coal, coke and briquettes, up $284m (3%), with volumes up 2%.
SELECTED MAJOR COMMODITIES, CURRENT PRICES (a)
Graph: SELECTED MAJOR COMMODITIES, CURRENT PRICES(a)



Net Exports of Goods Under Merchanting

Net exports of goods under merchanting, in seasonally adjusted terms at current prices, fell $8m (15%), with volumes down 17% and prices up 3%.


Non-monetary Gold

Non-monetary gold, in original and seasonally adjusted terms at current prices, rose $139m (4%), with volumes down 1% and prices up 4%.


GOODS DEBITS

The trend estimate of goods debits at current prices rose $409m (1%) to $66,755m in the March quarter 2014.

In seasonally adjusted terms at current prices, goods debits rose $972m (1%) to $66,873m, with volumes down 1% and prices up 2%.


Consumption Goods

Imports of consumption goods, in seasonally adjusted terms at current prices, rose $670m (3%) to $20,915m, with volumes up 1% and prices up 2%. The main components contributing to the rise were:
  • consumption goods n.e.s., up $352m (5%), with volumes up 6%
  • textiles, clothing and footwear, up $254m (8%), with volumes up 3% and prices up 5%.


Capital Goods

Imports of capital goods, in seasonally adjusted terms at current prices, fell $896m (6%) to $14,889m with volumes down 8% and prices up 3%. The main component contributing to the fall was capital goods n.e.s., down $1,380m (46%), with volumes down 49% and prices up 6%.

Partly offsetting this fall was the machinery and industrial equipment component, up $586m (12%), with volumes up 9% and prices up 3%.


Intermediate and Other Merchandise Goods

Imports of intermediate and other merchandise goods, in seasonally adjusted terms at current prices, rose $1,302m (5%) to $30,142m, with volumes up 3% and prices up 2%. The main components contributing to the rise were:
  • iron and steel, up $246m (28%), with volumes up 33% and prices down 3%
  • primary industrial supplies n.e.s., up $245m (91%), with volumes up 80% and prices up 6%
  • parts for transport equipment, up $243m (10%), with volumes up 6% and prices up 3%
  • processed industrial supplies n.e.s., up $232m (3%), with volumes up 2% and prices up 2%
  • other parts for capital goods, up $138m (4%), with volumes up 1% and prices up 3%.


Non-monetary Gold

Imports of non-monetary gold, in original and seasonally adjusted terms at current prices, fell $104m (10%) to $927m, with volumes down 15% and prices up 5%.


SERVICES

The trend estimate of net services at current prices was a deficit of $3,179m, a fall of $285m (8%) on the December quarter 2013 deficit of $3,464m.

In seasonally adjusted terms at current prices, net services was a deficit of $3,092m, a fall of $508m (14%) on the December quarter 2013 deficit of $3,600m.


Services Credits

Services credits, in seasonally adjusted terms at current prices, rose $295m (2%) to $14,568m with volumes up 2%. The main components contributing to the rise were:
  • travel, up $162m (2%), with volumes up 2%
  • other services, up $137m (3%), with volumes up 3%.

In seasonally adjusted terms, tourism related service credits rose $172m (2%) to $9,105m.


Services Debits

Services debits, in seasonally adjusted terms at current prices, fell $213m (1%) to $17,660m, with volumes down 4% and prices up 3%. The main components contributing to the fall were:
  • travel, down $83m (1%), with volumes down 5% and prices up 4%
  • transport, down $68m (2%), with volumes down 2% and prices up 1%.

In seasonally adjusted terms, tourism related service debits fell $184m (2%) to $9,069m.


PRIMARY INCOME

The trend estimate of the net primary income deficit at current prices fell $232m (2%) to $9,622m in the March quarter 2014.

The seasonally adjusted estimate of the net primary income deficit at current prices fell $1,811m (17%) to $8,781m in the March quarter 2014.

NET PRIMARY INCOME
Graph: NET PRIMARY INCOME



Primary Income Credits

Primary income credits, in seasonally adjusted terms at current prices, rose $1,077m (9%) to $13,419m. The main component contributing to the rise was direct investment assets, income on equity and investment fund shares, up $1,007m (21%).


Primary Income Debits

Primary income debits, in seasonally adjusted terms at current prices, fell $734m (3%) to $22,200m. The main component contributing to the fall was portfolio investment liabilities, investment income on equity and investment fund shares, down $734m (18%).


SECONDARY INCOME

The trend estimate of the net secondary income deficit at current prices, fell $8m (2%) to $489m in the March quarter 2014.

In seasonally adjusted terms, the net secondary income deficit at current prices, fell $24m (5%) to $482m in the March quarter 2014.


FINANCIAL ACCOUNT

The balance on financial account, in original terms, recorded a net inflow of $4.9b, which was driven by a net inflow of debt of $2.7b and net inflow of equity of $2.3b.

The financial account surplus decreased $8.8b to $4.9b in the March quarter 2014, from $13.7b in the December quarter 2013.

Direct investment recorded a net inflow of $4.4b in the March quarter 2014, a decrease of $11.6b from the net inflow of $16.0b in the December quarter 2013, where:
  • direct investment liabilities recorded an inflow of $3.1b, a decrease of $16.4b on the inflow of $19.5b in the December quarter 2013
  • direct investment assets recorded an inflow of $1.3b, a turnaround of $4.8b on the outflow of $3.5b in the December quarter 2013.

Portfolio investment recorded a net inflow of $7.4b, a decrease of $1.3b on the net inflow of $8.7b in the December quarter 2013, where:
  • debt securities recorded a net inflow of $9.9b, a decrease of $8.7b on the net inflow of $18.6b in the December quarter 2013
  • equity and investment fund shares recorded a net outflow of $2.5b, a decrease of $7.4b on the net outflow of $9.8b in the December quarter 2013.

Financial derivatives recorded a net outflow of $0.8b, a decrease of $10.3b from the net outflow of $11.0b in the December quarter 2013.

Other investment recorded a net outflow of $2.0b, a turnaround of $7.1b from the net inflow of $5.1b in the December quarter 2013, where:
  • loans with deposit-taking corporations recorded a net outflow of $10.2b, an increase of $1.0b on the net outflow of $9.2b in the December quarter 2013
  • currency and deposits with deposit-taking corporations recorded a net inflow of $5.7b, a decrease of $11.2b on the net inflow of $16.9b in the December quarter 2013.

Reserve assets recorded a net outflow of $4.0b, a decrease of $1.0b on the net outflow of $5.0b in the December quarter 2013.


INTERNATIONAL INVESTMENT POSITION


ANALYSIS

Australia's net international investment position at 31 March 2014 was a net foreign liability of $850.4b, up $11.9b on the 31 December 2013 position of $838.5b.

The changes contributing to this result are shown in the following table.

INTERNATIONAL INVESTMENT POSITION, Summary - March Quarter 2014

Net international investment position
Net foreign equity
Net foreign debt
$m
$m
$m

Position at beginning of period
838 535
-20 361
858 896
Changes in position reflecting
Transactions
4 930
2 269
2 661
Price changes
11 736
3 596
8 141
Exchange rate changes
-283
15 942
-16 225
Other adjustments
-4 508
-6 683
2 175
Total changes
11 876
15 124
-3 247
Position at end of period
850 411
-5 237
855 649




SUPPLEMENTARY INFORMATION


CONDITIONS

The conditions in the global economy showed modest improvements for most countries in the March quarter 2014. According to the Organisation for Economic Cooperation and Development (OECD)(footnote 1) , preliminary real GDP estimates in seasonally adjusted terms showed movement in quarterly growth for: Japan (1.5%), China (1.4%), Korea (0.9%), UK (0.8%), Germany (0.8%), Spain (0.4%), France (0.0%), USA (0.0%), Italy (-0.1%) and Netherlands (-1.4%).

Australia's international investment activities during the quarter were as follows:
  • foreign asset transactions were $3.1b in the March quarter 2014 compared to -$37.8b in the December quarter 2013
  • foreign liability transactions were $1.8b in the March quarter 2014 compared to $51.5b in the December quarter 2013.

The Australian share market, as measured by the MSCI global index(footnote 2) , increased 1.0% in the March quarter 2014, following an increase of 2.7% in the December quarter 2013. There were increases in the following markets: New Zealand 8.9%, Canada 4.9%, Switzerland 3.2%, Europe (excluding UK) 3.1%, France 2.8% and USA 1.3%. Decreases were recorded for: Japan 8.2%, Hong Kong 3.8%, UK 2.5%, Singapore 1.5% and Germany 0.6%. A market price change of $1.1b was recorded for portfolio foreign equity assets and $3.2b in portfolio foreign equity liabilities in the March quarter 2014.

According to Bloomberg(footnote 3) , the composite corporate benchmark yield decreased in Australia from 4.42% to 4.35%, UK from 3.85% to 3.69%, USA from 3.37% to 3.22%, Germany from 2.13% to 1.88% and in Japan from 0.49% to 0.43%. The long term 10 year government bond yields decreased in all four major markets: USA from 3.04% to 2.73%, UK from 3.04% to 2.73%, Germany from 1.94% to 1.57% and Japan from 0.74% to 0.63%. In Australia, the rate decreased from 4.24% to 4.10%. Market price changes were recorded for portfolio debt securities assets of $0.6b and liabilities of -$0.5b in the March quarter 2014, reflecting an increase in period average yields.

The Australian dollar appreciated against a number of the major currencies in the March quarter 2014. It increased 7.1% against the Canadian dollar, 6.0% against the Chinese renminbi, 5.1% against the New Taiwan dollar, 4.8% against the South African rand, 4.7% against the South Korean won, 3.8% against the Danish krone, 3.4% against the Euro, 3.1% against the Hong Kong dollar, 3.1% against the US dollar, 3.0% against the Swiss franc, 2.8% against the Singapore dollar, 2.1% against the UK pound sterling and 0.9% against the Japanese yen. The Australian dollar depreciated 3.9% against the Indonesian rupiah, 2.0% against the New Zealand dollar and 0.3% against the Indian rupee. The Trade Weighted Index (TWI)(footnote 4) ,(footnote 5) recorded an increase of 3.1%. This is reflected in the exchange rate changes for foreign assets of $25.1b and foreign liabilities of -$25.4b in the March quarter 2014.


RELATIONSHIP BETWEEN IPD, EPI AND IPI(footnote 6)

Differences between the IPD and International Trade Price Indexes can arise due to a number of methodological factors including differences in pricing points, timing, coverage and weights.

In original terms, the IPD for total goods credits rose 3.1% and the chain Laspeyres price index for goods exports rose 3.6%. The export price index (EPI)(footnote 7) rose 3.6% during the March quarter 2014.

The IPD in original terms for the metal ores and minerals goods credit component fell 0.10% between the December quarter 2013 and the March quarter 2014, while the EPI for the metal ores and minerals goods credit component rose 2.91%. The estimate of the IPD includes information not available at the time of compiling the EPI, including the negative $900m iron ore value adjustment applied to the March quarter 2014 (see the Value adjustments section for details). The EPI for the March quarter 2014 will be revised with the June quarter 2014 issue of International Trade Price Indexes, Australia (cat. no. 6457.0) on 31 July 2014.

In original terms, the IPD for total goods debits rose 2.8% and the chain Laspeyres price index for goods imports rose 3.0%. The import price index (IPI)(footnote 7) rose 3.2% during the March quarter 2014.

GOODS AND SERVICES, Price comparison - March Quarter 2014

Changes in
Seasonally adjusted
Original
Implicit price deflators(a)
Implicit price deflators(a)
International Trade price indexes(b)
Chain Laspeyres price indexes(a)
%
%
%
%

Exports
Goods
1.4
3.1
3.6
3.6
Services
0.2
0.1
na
0.2
Imports
Goods
2.2
2.8
3.2
3.0
Services
3.0
3.1
na
3.0

na not available
(a) Reference year 2011-12 = 100
(b) Source: International Trade Price Indexes, Australia (cat. no. 6457.0)

IMPLICIT PRICE DEFLATORS AND INTERNATIONAL TRADE PRICE INDEXES
Graph: IMPLICIT PRICE DEFLATORS AND INTERNATIONAL TRADE PRICE INDEXES



Commodity Price Indexes

The RBA Commodity Price Index(footnote 8) (average monthly index) for rural commodities increased 2.5% between the December quarter 2013 and March quarter 2014 while the EPI for rural goods increased 2.3%.

The RBA Commodity Price Index for non-rural commodities increased 2.6% while the EPI for non-rural goods total (excluding non-monetary gold) increased 3.8%.

Differences between the RBA Commodity Price Index and ABS price measures are largely a consequence of methodological differences used in the construction of the respective indexes, including coverage of included commodities and timing of source data.


FOOTNOTES

1 OECD Statistics Quarterly National Account, Organisation for Economic Cooperation and Development – Economic Department, viewed 21 May 2014 ttp://stats.oecd.org/> <back
2 MSCI Global Market Indexes 2014, Morgan Stanley Capital International, viewed 1 April 2014, ttp://www.msci.com/products/indexes/performance.html> <back
3 Bloomberg, Blooming Corporate Services, viewed 8 April 2014 <back
4 Exchange Rates – Daily – 2010 to 2013, Reserve Bank of Australia – Statistical Tables, viewed 8 April 2014, ttp://www.rba.gov.au/statistics/tables/index.html/> <back
5 Bloomberg, Blooming Corporate Services, viewed 8 April 2014 <back
6 In this commentary movements in indexes are based on data to four decimal places <back
7 Source: International Trade Price Indexes, Australia (cat. no. 6457.0) <back
8 For RBA Commodity Price Index methodology, see paragraph 23 of the Explanatory Notes <back

Bookmark and Share. Opens in a new window

Commonwealth of Australia 2014

Unless otherwise noted, content on this website is licensed under a Creative Commons Attribution 2.5 Australia Licence together with any terms, conditions and exclusions as set out in the website Copyright notice. For permission to do anything beyond the scope of this licence and copyright terms contact us.