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1301.0 - Year Book Australia, 2012  
Latest ISSUE Released at 11:30 AM (CANBERRA TIME) 24/05/2012   
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Int accounts and trade

STATISTICAL OVERVIEW

BALANCE OF PAYMENTS

The balance on current account for 2010–11 was a deficit of $33.2 billion, a decrease of $22.8 billion (41%) on the previous year (table 31.2). The balance on goods and services was a surplus of $20.9 billion, a turnaround of $25.5 billion on the deficit of $4.6 billion recorded in 2009–10. The balance on goods was a surplus of $27.7b and the balance on services was a deficit of $6.8b. The net primary income deficit rose by $3.3b (7%) with an increase in primary income credits of $5.9b (17%) and an increase in primary income debits of $9.2b (11%).

The deficit on capital account increased by $0.3b (91%) to $0.6b in 2010–11.

The financial account recorded a net inflow of investment into Australia in 2010–11 of $34.1b. This was largely driven by net portfolio investment of $33.8b together with net direct investment of $24.8b. This was countered by net outflows in financial derivatives of $11.3b, other investment of $10.1b and reserve assets of $3.2b.


31.2 BALANCE OF PAYMENTS(a), Summary

2006–07
2007–08
2008–09
2009–10
2010–11
$m
$m
$m
$m
$m

Current account
–60 543
–72 871
–37 272
–56 018
–33 229
Goods and services
–11 907
–24 353
7 353
–4 621
20 918
Credits
216 795
233 813
284 571
253 762
297 545
Debits
–228 702
–258 166
–277 218
–258 383
–276 627
Goods
–13 934
–22 227
10 733
–3 244
27 708
Credits
169 620
182 922
231 623
201 751
246 975
Debits
–183 554
–205 149
–220 890
–204 995
–219 267
Services
2 027
–2 126
–3 380
–1 377
–6 790
Credits
47 175
50 891
52 948
52 011
50 570
Debits
–45 148
–53 017
–56 328
–53 388
–57 360
Primary income
–48 393
–48 572
–44 376
–50 327
–53 613
Credits
36 926
44 528
43 364
34 285
40 184
Debits
–85 319
–93 099
–87 741
–84 612
–93 798
Secondary income
–243
54
–249
–1 070
–534
Credits
6 403
6 639
6 667
6 315
6 605
Debits
–6 646
–6 585
–6 916
–7 385
–7 139
Capital and financial account
61 153
72 000
38 139
54 763
33 503
Capital account
281
–232
–611
–291
–556
Acquisition/disposal of non-produced, non-financial assets
423
–1
–244
–4
–29
Credits
489
9
2
22
73
Debits
–66
–10
–246
–26
–102
Capital transfers
–142
–231
–367
–287
–527
Credits
0
0
0
0
0
Debits
–142
–231
–367
–287
–527
Financial account
60 872
72 232
38 750
55 054
34 059
Direct investment
11 507
29 746
17 336
20 668
24 791
Assets
–34 432
–27 103
–30 999
–19 387
–15 053
Liabilities
45 938
56 850
48 335
40 055
39 843
Portfolio investment
66 370
–5 456
48 539
70 085
33 829
Financial derivatives
2 006
–6 243
–3 491
–9 762
–11 269
Other investment
1 116
9 893
–11 738
–31 866
–10 093
Reserve assets
–20 127
44 292
–11 896
5 929
–3 199
Net errors and omissions
–611
871
–867
1 255
–273

(a) In current prices.

Source: Balance of Payments and International Investment Position, Australia (5302.0).


Graph 31.3 shows the differing influences of the balance on goods and services (trade balance) and the net primary income deficit on the balance on current account. The net primary income deficit rose from $18.5 billion in 1996–97 to $53.6 billion in 2010–11. The underlying level of net primary income drives the level of the current account deficit, as Australia continues to service its external liabilities.

31.3 Current Account, Summary



RATIOS

The ratio of the current account deficit to gross domestic product (GDP) was –2.4% in 2010–11, a substantial decrease on the previous year, which was –4.3% (table 31.4).


31.4 RATIOS

Financial Year
2006–07
2007–08
2008–09
2009–10
2010–11
%
%
%
%
%

To GDP
Current account
–5.6
–6.2
–3.0
–4.3
–2.4
Good and services
–1.1
–2.1
0.6
–0.4
1.5
Credits
20.0
19.9
22.7
19.6
21.2
Debits
–21.1
–22.0
–22.1
–20.0
–19.8
Primary income
–4.5
–4.1
–3.5
–3.9
–3.8
Net international investment position(a)
56.6
55.9
56.2
60.1
57.0
Net foreign equity(a)
6.8
4.8
6.2
7.1
8.0
Net foreign debt(a)
49.8
51.1
50.0
53.0
49.0
To goods and services credits
Net investment income
–21.1
–20.3
–15.1
–19.2
–17.5
Net income on foreign equity
–9.7
–8.0
–4.5
–8.7
–8.8
Net income on foreign debt
–12.0
–12.3
–10.5
–10.5
–8.7

(a) These ratios are derived using levels for those series at the end of period and GDP for the year ended with that period.
Source: Balance of Payments and International Investment Position, Australia (5302.0).


EXCHANGE RATES

Graph 31.5 shows movements in the annual average exchange rates against the Australian dollar for the four major currencies. Values of non-financial and financial transactions as well as the values of positions of financial assets and liabilities may be expressed initially in a variety of currencies or in other standards of value. The conversion of these values into a reference unit of account is necessary for the construction of consistent and analytically meaningful accounts and is typically carried out at the point of transaction or reporting to Customs based on current trading day values.

31.5 EXCHANGE RATES, Units of foreign currency per $A(a)



INTERNATIONAL TRADE IN GOODS AND SERVICES (BALANCE OF PAYMENTS BASIS)

Australia’s international trade in goods and services (chain volume measures) for the five years to 2010–11 is shown in table 31.6.

Chain volume measures of exports and imports remove the effects of price changes. They provide measures, in dollar values, which indicate changes in the actual volume of exports and imports.

Between 2009–10 and 2010–11, the chain volume measures of Australia’s exports of goods and services increased by $0.6 billion, while imports increased by $26.9 billion (10%). In comparison, the current price value of exports, which incorporates both volume and price changes, increased by $43.8b (17%) (table 31.2). This indicates that, on average, the prices of Australia’s exports increased more rapidly than their volumes over the period.

Table 31.6 also presents various price indexes for Australia’s trade in goods and services. The implicit price deflators (IPDs) are derived by dividing the current price measures (table 31.2) by the corresponding chain volume measures. These IPDs reflect not only price change, but also compositional effects from year to year.

Australia’s terms of trade, which is a measure of the purchasing power of its exports over imported goods and services (derived by dividing the IPD for credits by the IPD for debits) rose by 20.6% to 120.6 in 2010–11, reflecting a 17.0% rise in the IPD for goods and services credits and a 3.0% fall in the IPD for goods and services debits.


31.6 CHAIN VOLUME MEASURES, IMPLICIT PRICE DEFLATORS AND TERMS OF TRADE(a)

Financial Year
2006–07
2007–08
2008–09
2009–10
2010–11

CHAIN VOLUME MEASURES ($m)

Goods and services
7 665
–15 969
–3 562
–4 621
–30 913
Goods and services credits
228 442
236 965
241 050
253 762
254 405
Goods credits
178 175
184 242
187 975
201 751
204 841
Services credits
51 136
53 651
54 023
52 011
49 564
Goods and services debits
–220 778
–252 934
–244 612
–258 383
–285 318
Goods debits
–179 086
–202 038
–195 181
–204 995
–224 250
Services debits
–41 801
–50 862
–49 296
–53 388
–61 068

IMPLICIT PRICE DEFLATORS (index)

Goods and services credits
94.9
98.7
118.1
100
117.0
Goods credits
95.2
99.3
123.2
100
120.6
Services credits
92.3
94.9
98.0
100
102.0
Goods and services debits
103.6
102.1
113.3
100
97.0
Goods debits
102.5
101.5
113.2
100
97.8
Services debits
108.0
104.2
114.3
100
93.9

TERMS OF TRADE (index)

Goods and services
91.6
96.7
104.2
100
120.6
Goods
92.9
97.8
108.9
100
123.3
Services
85.4
91.0
85.8
100
108.6

(a) Reference year for chain volume measures, price and terms of trade indexes is 2009–10.
Source: Balance of Payments and International Investment Position, Australia (5302.0).


INTERNATIONAL TRADE IN GOODS BY COMMODITY (MERCHANDISE TRADE BASIS)

In 2010–11, total exports of goods on a merchandise trade basis increased $45.0 billion (22%) to $245.7 billion. Graph 31.7 shows the top 10 commodity exports in 2010–11. The largest increases by value were Iron ore and concentrates, up $23.3b (66%) and Coal, not agglomerated, up $7.4b (20%).

31.7 Merchandise Exports of major commodities, By commodity group(a)



In 2010–11, total imports of goods on a merchandise trade basis increased $10.6 billion (5%) to $214.2 billion. Graph 31.8 shows the top 10 commodity imports in 2010–11. The largest increase by value was Crude petroleum oils, up $4.6b (31%) and the largest decrease was Gold, non-monetary, down $2.3b (30%).

31.8 Merchandise Exports of major commodities, By commodity group(a)



INTERNATIONAL TRADE IN GOODS BY COUNTRY (MERCHANDISE TRADE BASIS)

For exports, country refers to the country to which the goods were consigned at the time of export. For imports, country refers to the country of origin of the goods, that is, where the majority of processing of the goods took place. Table 31.9 shows merchandise exports to Australia's 10 main destinations and table 31.10 shows merchandise imports from the 10 main countries of origin, in 2010–11.

In 2010–11, Australia recorded a merchandise trade surplus of $31.6 billion. The largest trade surpluses by country are as follows:
  • Japan – trade surplus of $30.3b, up $11.0b due to a $9.9b increase in exports and a decrease in imports. Contributing to the increase in exports were Metalliferous ores and metal scrap (up $4.5b) and Coal, coke and briquettes (up $2.5b).
  • China (excluding SARs and Taiwan) – trade surplus of $23.7b, up $13.6b due to an $18.3b increase in exports and an increase in imports. Contributing to the increase in exports were Metalliferous ores and metal scrap (up $15.6b) and Petroleum (up $1.1b).
  • Korea, Republic of (South) – trade surplus of $15.6b, up $6.1b due to a $6.1b increase in exports. Contributing to the increase in exports were Metalliferous ores and metal scrap (up $3.6b) and Coal, coke and briquettes (up $1.6b).

31.9 INTERNATIONAL MERCHANDISE EXPORTS, Top 10 countries2010–11

Value (FOB)(a)
Percentage share of value (FOB)
Average annual compound growth over five years
$m
%
%

China (excludes SARs and Taiwan)
64 854
26.4
23.3
Japan
46 951
19.1
7.6
Korea, Republic of (South)
22 573
9.2
11.5
India
15 765
6.4
9.3
Taiwan
9 109
3.7
8.0
United States of America
9 066
3.7
–1.6
New Zealand
7 691
3.1
–4.0
Thailand
6 950
2.8
10.3
United Kingdom
6 604
2.7
1.5
Singapore
5 466
2.2
3.3

(a) Free-on-board.

Source: International Trade in Goods and Services, Australia (5368.0).


In 2010–11, Australia recorded a merchandise trade deficit with a number of countries, the largest of which were:
  • United States of America – trade deficit of $14.2 billion, an increase of $1.9 billion on the previous year’s deficit, with a $0.5 billion decrease in exports and a $1.4 billion increase in imports. Contributing to the increase in imports were Road vehicles (incl. air-cushion vehicles) (up $0.8b) and Power generating machinery and equipment (up $0.3b).
  • Germany – trade deficit of $8.1b, a decrease of $0.9b on the previous year's deficit, with a $0.5b increase in exports and $0.5b decrease in imports. Contributing to the decrease in imports were Machinery specialised for particular industries (down $0.4b) and Transport equipment (excl. road vehicles) (down $0.2b).

31.10 INTERNATIONAL MERCHANDISE IMPORTS, Top 10 countries2010–11

Value (Customs value)
Percentage share of value (Customs value)
Average annual compound growth over five years
$m
%
%

China (excludes SARs and Taiwan)
41 109
19.2
8.7
United States of America
23 228
10.9
–1.4
Japan
16 692
7.8
–0.8
Singapore
11 419
5.3
2.4
Germany
10 247
4.8
2.0
Thailand
9 117
4.3
4.8
Malaysia
8 815
4.1
6.0
New Zealand
7 364
3.4
5.6
Korea, Republic of (South)
6 984
3.3
3.0
United Kingdom
5 985
2.8
–4.2

Source: International Trade in Goods and Services, Australia (5368.0).


INTERNATIONAL TRADE IN SERVICES

Table 31.11 provides details of Australia’s international trade in services, by service type.

In 2006–07, Australia recorded a surplus on its international trade in services (i.e. the value of exports was greater than the value of imports). However, between 2007–08 and 2010–11, Australia recorded annual deficits. Between 2009–10 and 2010–11, the services deficit increased $5.4 billion (393%), with a decrease in exports of $1.4 billion (3%) and an increase in imports of $4.0 billion (7%). The major contributor to the decrease in services exports in 2010–11 was a decrease in Travel services, caused by a decrease in Education-related personal travel. Other business services also decreased. These decreases were partially offset by small increases in all categories of Transport services, except Freight. There were increases in all the main categories of services imports with large contributions by Other business services, Travel services and Transport services.


31.11 INTERNATIONAL TRADE IN SERVICES, By service type

2006–07
2007–08
2008–09
2009–10
2010–11
$m
$m
$m
$m
$m

EXPORTS

Services
47 175
50 891
52 948
52 011
50 570
Manufacturing services on physical inputs owned by others
21
13
45
48
33
Maintenance and repair services n.i.e.(a)
90
103
86
57
49
Transport
7 891
8 510
7 342
6 189
6 339
Passenger
3 936
3 843
3 410
2 610
2 714
Freight
771
1 464
851
436
403
Other
1 995
2 263
2 127
2 188
2 253
Postal and courier services
1 189
940
954
955
969
Travel
25 161
28 250
31 086
32 918
30 968
Other
14 012
14 015
14 389
12 799
13 181

IMPORTS

Services
–45 148
–53 017
–56 328
–53 388
–57 360
Manufacturing services on physical inputs owned by others
0
0
0
0
–1
Maintenance and repair services n.i.e.(a)
–131
–117
–193
–294
–342
Transport
–15 362
–16 427
–15 832
–13 727
–14 749
Passenger
–6 593
–6 998
–5 835
–5 118
–6 103
Freight
–8 303
–8 924
–9 388
–8 142
–8 244
Other
–298
–327
–437
–309
–288
Postal and courier services
–168
–178
–172
–158
–114
Travel
–15 934
–20 153
–22 082
–23 285
–25 374
Other
–13 721
–16 320
–18 221
–16 082
–16 894

(a) Not included elsewhere.

Source: Balance of Payments and International Investment Position, Australia (5302.0).


Tables 31.12 and 31.13 show Australia's main trading partners for exports and imports of services in 2010–11.


31.12 SERVICES EXPORTS, Top 10 countries2010–11

Value
Percentage share of value
Average annual compound growth over five years
$m
%
%

China (excludes SARs and Taiwan)
5 662
11.2
12.2
United States of America
5 176
10.2
1.4
United Kingdom
3 992
7.9
–3.1
New Zealand
3 348
6.6
0.4
Singapore
2 823
5.6
1.5
India
2 501
4.9
12.6
Japan
1 956
3.9
–8.6
Korea, Republic of (South)
1 735
3.4
3.8
Hong Kong (SAR of China)
1 727
3.4
1.7
Malaysia
1 665
3.3
6.2

Source: International Trade in Goods and Services, Australia (5368.0).

31.13 SERVICES IMPORTS, Top 10 countries2010–11

Value
Percentage share of value
Average annual compound growth over five years
$m
%
%

United States of America
–10 359
18.1
8.3
United Kingdom
–4 891
8.5
2.7
Singapore
–3 724
6.5
1.0
New Zealand
–2 713
4.7
6.3
Japan
–2 132
3.7
2.4
Indonesia
–2 065
3.6
26.2
Thailand
–2 036
3.5
14.3
Hong Kong (SAR of China)
–1 980
3.5
4.0
China (excludes SARs and Taiwan)
–1 639
2.9
7.9
Germany
–1 448
2.5
4.0

Source: International Trade in Goods and Services, Australia (5368.0).


In 2010–11, Australia recorded a deficit on its trade in services with its major services trading partner, the United States of America, as well as deficits for Singapore, the United Kingdom, Hong Kong (SAR of China) and Japan. A large trade surplus was recorded with China (excludes SARs and Taiwan), and a smaller surplus with New Zealand.


INTERNATIONAL INVESTMENT POSITION

Australia’s net international investment position is the difference between the levels of Australia’s foreign financial liabilities and the levels of its foreign financial assets. Historically, Australia has had a net liability position with the rest of the world.

Graph 31.14 shows the components of Australia's international investment position, indicating that the growth in Australia's net international liabilities between 30 June 2001 and 30 June 2011 is mostly due to a rise in Australia's net foreign debt. At 30 June 2011, Australia's net foreign liabilities of $797.7 billion were composed of net foreign debt of $686.2 billion and net foreign equity of $111.4 billion.

31.14 NET INTERNATIONAL INVESTMENT—30 June



Table 31.15 provides a reconciliation between opening and closing levels for foreign financial assets, foreign financial liabilities and Australia’s net international investment position for the past three financial years. Increases and decreases in these assets and liabilities are due to financial transactions (investment flows), price changes (share prices and interest yields), exchange rate changes and other adjustments.


31.15 INTERNATIONAL INVESTMENT POSITION

Changes in position reflecting

Position at beginning of period
Transactions
Price changes
Exchange rate changes
Other adjustments
Position at end of period
$m
$m
$m
$m
$m
$m

NET INTERNATIONAL INVESTMENT POSITION

Total
2008–09
657 553
38 750
–17 618
29 397
–4 512
703 571
2009–10
703 571
55 054
15 169
5 498
–1 428
777 864
2010–11
777 864
34 059
–47 286
34 763
–1 749
797 651
Equity
2008–09
56 601
65 739
4 170
–41 856
–6 721
77 932
2009–10
77 932
–10 718
18 937
9 322
–3 694
91 780
2010–11
91 780
–4 754
–50 492
77 875
–2 991
111 418
Debt
2008–09
600 952
–26 989
–21 788
71 253
2 211
625 639
2009–10
625 639
65 772
–3 768
–3 823
2 265
686 084
2010–11
686 084
38 813
3 205
–43 113
1 243
686 233

FOREIGN ASSETS

Total
2008–09
–1 083 291
–58 573
130 759
–73 031
–5 094
–1 089 230
2009–10
–1 089 230
–94 554
–38 212
28 192
–3 495
–1 197 299
2010–11
–1 197 299
–72 021
–81 263
112 544
–5 746
–1 243 783
Equity
2008–09
–580 845
–18 365
131 501
–41 856
–3 313
–512 879
2009–10
–512 879
–58 842
–12 763
9 322
–3 887
–579 050
2010–11
–579 050
–55 645
–66 207
77 875
–4 196
–627 223
Debt
2008–09
–502 445
–40 209
–742
–31 175
–1 781
–576 352
2009–10
–576 352
–35 712
–25 449
18 871
393
–618 249
2010–11
–618 249
–16 376
–15 056
34 669
–1 549
–616 560

FOREIGN LIABILITIES

Total
2008–09
1 740 844
97 323
–148 376
102 428
581
1 792 801
2009–10
1 792 801
149 608
53 381
–22 694
2 067
1 975 163
2010–11
1 975 163
106 080
33 976
–77 782
3 997
2 041 435
Equity
2008–09
637 446
84 104
–127 331
–3 409
590 811
2009–10
590 811
48 124
31 700
194
670 829
2010–11
670 829
50 891
15 715
1 205
738 641
Debt
2008–09
1 103 398
13 220
–21 046
102 428
3 991
1 201 990
2009–10
1 201 990
101 484
21 680
–22 694
1 874
1 304 334
2010–11
1 304 334
55 189
18 261
–77 782
2 791
1 302 794

– nil or rounded to zero (including null cells)
Source: Balance of Payments and International Investment Position, Australia (5302.0).


FOREIGN DEBT

Australia's foreign debt liabilities include borrowing from non-residents and other non-equity liabilities to non-residents such as derivatives positions with a negative market value. Foreign debt assets include lending to non-residents and other non-equity assets such as derivatives positions with a positive market value. The majority of public sector debt assets are held by the Reserve Bank of Australia as reserve assets.

Table 31.16 shows foreign debt assets and liabilities and net foreign debt attributable to the public sector (general government plus public financial and non-financial corporations) and the private sector. At 30 June 2011, the public sector was in a net debt liability position with non-residents of $148.9 billion. Of total private sector net foreign debt of $537.3 billion at 30 June 2011, private financial corporations accounted for $354.1 billion and private non-financial corporations accounted for $183.3 billion.


Table 31.16 LEVELS OF FOREIGN DEBT30 June

2007
2008
2009
2010
2011
$m
$m
$m
$m
$m

Foreign debt assets
–462 538
–502 445
–576 352
–618 249
–616 560
Public sector
–97 831
–57 685
–80 920
–84 512
–85 371
Private sector
–364 706
–444 760
–495 432
–533 738
–531 189
Foreign debt liabilities
1 002 298
1 103 398
1 201 990
1 304 334
1 302 794
Public sector
82 212
90 295
119 904
197 878
234 281
Private sector
920 086
1 013 103
1 082 086
1 106 456
1 068 513
Net foreign debt
539 760
600 952
625 639
686 084
686 233
Public sector
–15 619
32 610
38 985
113 366
148 910
Private sector
555 379
568 342
586 654
572 718
537 323

Source: Balance of Payments and International Investment Position, Australia (5302.0).


LEVELS OF FOREIGN ASSETS AND FOREIGN LIABILITIES

In table 31.17, levels of investment are categorised by assets/liabilities and functional category (Direct, Portfolio, Financial derivatives, Other and Reserve assets).

Direct investment is a category of international investment that reflects the objective of obtaining a lasting interest by a resident in one economy in an enterprise in another economy, and implies a significant degree of influence by the investor in the management of the enterprise. A foreign Direct investment relationship is established when an investor, who is a resident in one economy, holds 10% or more of the ordinary shares or voting stock of an enterprise ('direct investment enterprise') in another economy. The Portfolio investment category covers investment in equity where the investor holds less than 10% of the ordinary shares or voting stock of an enterprise and investment in debt securities. The remaining categories are Financial derivatives, Other investment and Reserve assets (in the case of foreign assets).

The 2010–11 net international investment position increased by $19.8 billion over 2009–10 (table 31.15). The level of foreign liabilities rose $66.3 billion (table 31.17), while the level of foreign assets rose $46.5 billion.


Table 31.17 LEVELS OF FOREIGN ASSETS AND FOREIGN LIABILITIES30 June

2007
2008
2009
2010
2011
$m
$m
$m
$m
$m

Levels of foreign assets
–1 049 815
–1 083 291
–1 089 230
–1 197 299
–1 243 783
Direct investment
–374 270
–372 818
–356 784
–379 549
–387 930
Portfolio investment
–398 884
–409 094
–361 762
–448 623
–482 597
Financial derivatives
–55 567
–99 370
–101 869
–98 256
–90 084
Other investment
–141 411
–166 152
–216 504
–227 134
–242 042
Reserve assets
–79 682
–35 856
–52 311
–43 737
–41 130
Levels of foreign liabilities
1 663 001
1 740 844
1 792 801
1 975 163
2 041 435
Direct investment
400 662
439 514
446 298
491 988
515 642
Portfolio investment
1 001 863
972 558
966 449
1 119 958
1163 112
Financial derivatives
66 623
104 713
101 026
98 690
88 555
Other investment
193 852
224 058
279 028
264 526
274 125

Source: Balance of Payments and International Investment Position, Australia (5302.0).

 

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Statistics contained in the Year Book are the most recent available at the time of preparation. In many cases, the ABS website and the websites of other organisations provide access to more recent data. Each Year Book table or graph and the bibliography at the end of each chapter provides hyperlinks to the most up to date data release where available.

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