Australian Bureau of Statistics

Rate the ABS website
ABS Home > Statistics > By Release Date
ABS @ Facebook ABS @ Twitter ABS RSS ABS Email notification service
5302.0 - Balance of Payments and International Investment Position, Australia, Dec 2011 Quality Declaration 
Previous ISSUE Released at 11:30 AM (CANBERRA TIME) 06/03/2012   
   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 December quarter 2011 current account deficit was $9,401m, a rise of $1,294m (16%) on the September quarter 2011 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 - December Quarter 2011

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

Seasonally Adjusted

Balance on current account
-8 374
-2 550
-43.8
Balance on goods and services
3 589
-2 544
-41.5
Net goods
6 377
-2 651
-29.4
Net services
-2 788
107
3.7
Net primary income
-11 819
16
0.1
Net secondary income
-143
-21
-17.2

Trend

Balance on current account
-6 883
134
1.9
Balance on goods and services
4 957
-164
-3.2
Net goods
7 863
119
1.5
Net services
-2 906
-283
-10.8
Net primary income
-11 708
310
2.6
Net secondary income
-133
-12
-9.9




VOLUMES AND PRICES

Goods and Services

In seasonally adjusted chain volume terms, the balance on goods and services was a deficit of $13,228m, a fall of $861m (6%) on the September quarter 2011 deficit of $14,089m.

The net deficit on goods fell $604m (6%) on the September quarter 2011 deficit of $9,502m. Goods credits rose $1,464m (3%) and goods debits rose $860m (1%). The net deficit on services fell $257m (6%) on the September quarter 2011 deficit of $4,587m.

The decrease in the balance on goods and services deficit, in seasonally adjusted chain volume terms, is expected to contribute 0.3 percentage points to growth in the December quarter 2011 volume measure of GDP, assuming no significant revision to the GDP chain volume estimate for the September quarter 2011.

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 fell 4.7% to 125.5 with a decrease of 1.7% in the implicit price deflator (IPD) for goods and services credits and an increase of 3.1% in the IPD for goods and services debits.

In trend terms, the terms of trade for net goods and services rose 0.5% to 129.3.

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 was a surplus of $7,863m, a rise of $119m (2%) on the September quarter 2011 surplus of $7,744m.

In seasonally adjusted terms at current prices, net goods recorded a surplus of $6,377m, a fall of $2,651m (29%) on the September quarter 2011 surplus of $9,028m.

GOODS, Price and volume analysis: Seasonally Adjusted - December Quarter 2011

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

Exports
309
0.4
2.8
-2.3
Rural goods
296
3.4
4.7
-1.2
Non-rural goods
-184
-0.3
2.6
-2.9
Net exports of goods under merchanting
-11
-157.1
-160.0
-7.5
Non-monetary gold
207
4.8
0.6
4.2
Imports
2 959
4.9
1.4
3.5
Consumption goods
209
1.3
-0.4
1.7
Capital goods
1 336
8.5
5.4
2.9
Intermediate and other merchandise goods
1 018
3.8
-1.1
5.0
Non-monetary gold
398
23.7
19.8
3.2




Services

SERVICES, Price and volume analysis: Seasonally Adjusted - December Quarter 2011

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

Exports
28
0.2
-0.2
0.5
Manufacturing services on physical inputs owned by others
-3
-42.9
-42.9
1.0
Maintenance and repair services n.i.e.
-5
-35.7
-30.8
1.0
Transport
26
1.7
1.4
0.3
Travel
-40
-0.6
-0.8
0.2
Other services
50
1.5
0.4
1.1
Imports
-79
-0.5
-1.7
1.2
Manufacturing services on physical inputs owned by others
-
-
-
-
Maintenance and repair services n.i.e.
15
19.0
17.2
2.3
Transport
-102
-2.6
-3.3
0.7
Travel
89
1.3
0.5
0.9
Other services
-81
-1.8
-4.0
2.3

- nil or rounded to zero (including null cells)



GOODS CREDITS

The trend estimate of goods credits at current prices rose $2,218m (3%) to $70,542m in the December quarter 2011.

In seasonally adjusted terms at current prices, goods credits rose $309m to $69,739m, with volumes up 3% and prices down 2%.


Rural Goods

Exports of rural goods, in seasonally adjusted terms at current prices, rose $296m (3%) to $9,046m, with volumes up 5% and prices down 1%. The main component contributing to the rise was cereal grains and cereal preparations, up $346m (16%), with volumes up 21% and prices down 4%.

Partly offsetting this rise was the wool and sheepskins component, down $72m (9%), with volumes down 7% and prices down 2%.


Non-rural Goods

Exports of non-rural goods, in seasonally adjusted terms at current prices, fell $184m to $56,210m, with volumes up 3% and prices down 3%. The main components contributing to the fall were:
  • metal ores and minerals, down $625m (3%), with volumes up 6% and prices down 8%
  • other manufactures, down $175m (4%), with volumes down 4%
  • metals (excl. non-monetary gold), down $162m (5%), with volumes up 3% and prices down 7%.

Partly offsetting these falls were:
  • other mineral fuels, up $422m (7%), with volumes down 2% and prices up 9%
  • coal, cokes and briquettes, up $422m (3%), with volumes up 5% and prices down 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 was -$18m.


Non-monetary Gold

Non-monetary gold, in seasonally adjusted terms at current prices, rose $207m (5%), with volumes up 1% and prices up 4%.


GOODS DEBITS

The trend estimate of goods debits at current prices rose $2,099m (3%) to $62,679m in the December quarter 2011.

In seasonally adjusted terms at current prices, goods debits rose $2,959m (5%) to $63,361m, with volumes up 1% and prices up 4%.


Consumption Goods

Imports of consumption goods, in seasonally adjusted terms at current prices, rose $209m (1%) to $16,484m, with prices up 2%. The main components contributing to the rise were:
  • consumption goods n.e.s., up $96m (2%), with volumes down 1% and prices up 3%
  • food and beverages, mainly for consumption, up $81m (3%), with volumes up 1% and prices up 2%.


Capital Goods

Imports of capital goods, in seasonally adjusted terms at current prices, rose $1,336m (9%) to $17,018m with volumes up 5% and prices up 3%. The main components contributing to the rise were:
  • civil aircraft and confidentialised items, up $723m (54%), with volumes up 46% and prices up 5%
  • telecommunications equipment, up $384m (22%), with volumes up 17% and prices up 5%
  • ADP equipment, up $190m (10%), with volumes up 7% and prices up 2%.

Partly offsetting these rises was the industrial transport equipment n.e.s. component, down $104m (5%), with volumes down 4% and prices down 1%.


Intermediate and Other Merchandise Goods

Imports of intermediate and other merchandise goods, in seasonally adjusted terms at current prices, rose $1,018m (4%) to $27,782m, with volumes down 1% and prices up 5%. The main component contributing to the rise was fuels and lubricants, up $921m (10%), with volumes down 2% and prices up 13%.

Partly offsetting this rise was other parts for capital goods, down $109m (3%), with volumes down 5% and prices up 3%.


Non-monetary Gold

Imports of non-monetary gold, in seasonally adjusted terms at current prices, rose $398m (24%) to $2,078m, with volumes up 20% and prices up 3%.


SERVICES

The trend estimate of net services at current prices was a deficit of $2,906m, a rise of $283m (11%) on the September quarter 2011 deficit of $2,623m.

In seasonally adjusted terms at current prices, net services recorded a deficit of $2,788m, a fall of $107m (4%) on the September quarter 2011 deficit of $2,895m.


Services Credits

Services credits, in seasonally adjusted terms at current prices, rose $28m to $12,274m. The main components contributing to the rise were:
  • other services, up $50m (1%), with prices up 1%
  • transport, up $26m (2%), with volumes up 1%.

Partly offsetting these rises was the travel component, down $40m (1%), with volumes down 1%.

In seasonally adjusted terms, tourism related service credits remained steady at $7,888m.


Services Debits

Services debits, in seasonally adjusted terms at current prices, fell $79m (1%) to $15,062m, with volumes down 2% and prices up 1%. The main components contributing to the fall were:
  • transport, down $102m (3%), with volumes down 3% and prices up 1%
  • other services, down $81m (2%), with volumes down 4% and prices up 2%.

Partly offsetting these falls was the travel component, up $89m (1%), with prices up 1%.

In seasonally adjusted terms, tourism related service debits rose $58m (1%) to $8,280m.


PRIMARY INCOME

The trend estimate of the net primary income deficit at current prices fell $310m (3%) to $11,708m in the December quarter 2011.

In seasonally adjusted terms, the net primary income deficit fell $16m to $11,819m in the December quarter 2011.

NET PRIMARY INCOME
Graph: NET PRIMARY INCOME



Primary Income Credits

Primary income credits, in seasonally adjusted terms at current prices, rose $22m to $10,647m. The main components contributing to the rise were:
  • direct investment assets, income on equity and investment fund shares, up $36m (1%)
  • direct investment assets, interest, up $33m (11%).

Partly offsetting these rises were:
  • portfolio investment assets, down $37m (1%)
  • other investment assets, down $11m (3%).


Primary Income Debits

Primary income debits, in seasonally adjusted terms at current prices, rose by $7m to $22,467m. The main components contributing to the rise were:
  • portfolio investment liabilities, interest, up $185m (3%)
  • compensation of employees, up $75m (9%)
  • direct investment liabilities, interest, up $57m (4%).

Partly offsetting these rises were:
  • direct investment liabilities, income on equity and investment fund shares, down $275m (3%)
  • portfolio investment liabilities, investment income on equity and investment fund shares, down $34m (1%).


SECONDARY INCOME

The trend estimate of net secondary income deficit at current prices, rose $12m (10%) to $133m in the December quarter 2011.

In seasonally adjusted terms, the net secondary income deficit at current prices, rose $21m (17%) to $143m in the December quarter 2011.


FINANCIAL ACCOUNT

The balance on financial account, in original terms, recorded a net inflow of $9.2b, with a net inflow of $11.6b of equity and a net outflow of $2.4b of debt.

The financial account surplus increased $1.4b, from $7.7b in September quarter 2011 to $9.2b in December quarter 2011.

Direct investment recorded a net inflow of $18.5b in December quarter 2011, an increase of $12.7b from the net inflow of $5.9b in September quarter 2011, where:
  • direct investment liabilities recorded an inflow of $23.9b, an increase of $4.4b on the inflow of $19.6 in September quarter 2011
  • direct investment assets recorded an outflow of $5.4b, a decrease of $8.3b on the outflow of $13.7b in September quarter 2011.

Portfolio investment recorded a net inflow of $15.0b, a decrease of $6.3b on the net inflow of $21.3b in September quarter 2011, where:
  • equity and investment fund shares recorded a net outflow of $5.6b
  • debt securities recorded a net inflow of $20.6b, where portfolio investment liabilities, debt securities increased $1.2b from $18.8b of issues in September quarter 2011.

Financial derivatives recorded a net outflow of $0.2b, a decrease of $17.7b from the net outflow of $17.9b in September quarter 2011.

Other investment recorded a net outflow of $20.4b, an increase of $19.3b from the net outflow of $1.2b in September quarter 2011.

Reserve assets recorded a net outflow of $3.7b, an increase of $3.4b from the net outflow of $0.3b in September quarter 2011.


INTERNATIONAL INVESTMENT POSITION


ANALYSIS

Australia's net international investment position at 31 December 2011 was a net foreign liability of $854.7b, up $1.7b on the 30 September 2011 position of $852.9b.

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

INTERNATIONAL INVESTMENT POSITION, Summary - December Quarter 2011

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

Position at beginning of period
852 932
111 733
741 200
Changes in position reflecting
Transactions
9 156
11 581
-2 426
Price changes
-16 340
-25 812
9 473
Exchange rate changes
9 475
22 104
-12 629
Other adjustments
-571
-338
-233
Total changes
1 720
7 535
-5 815
Position at end of period
854 652
119 268
735 385




SUPPLEMENTARY INFORMATION


CONDITIONS

The conditions in the global economy showed moderate increases for most countries in the December quarter 2011. According to the Organisation for Economic Cooperation and Development (OECD), preliminary real GDP estimates in seasonally adjusted terms showed movement in quarterly growth for: USA (0.7%), France (0.2%), Japan (-0.6%), Germany (-0.2%), UK (-0.2%) and overall OECD total (0.1%).

Australia's international investment activities during the quarter were as follows:
  • foreign asset transactions were $3.6b in December quarter 2011 compared to -$23.2b in September quarter 2011
  • foreign liability transactions were $5.6b in December quarter 2011 compared to $30.9b in September quarter 2011.

The Australian share market, as measured by the MSCI global index, increased 0.9% in December quarter 2011, following a 13.4% decrease in September quarter 2011. There were increases in all major markets: USA 11.1%, United Kingdom 8.4%, Germany 7.4%, Switzerland 7.2%, France 5.7%, Hong Kong 5.5%, Europe ex UK 3.1% and Canada 2.1%. The decreases were in New Zealand -4.5%, Japan -4.2% and Singapore -2.1%. A market price change of -$16.5b was recorded for foreign equity assets and -$9.3b in foreign equity liabilities during December quarter 2011.

According to Reuters, the composite corporate benchmark yield increased in Australia from 6.10% to 6.41%, in UK (4.00% to 4.29%), in Germany (3.4% to 3.5%), in Japan (1.2% to 1.5%) but decreased for USA from 3.1% to 3.0%. Long term government bond yields decreased in all major markets in December quarter 2011. The 10 year government bond yields decreased in the UK (2.4% to 2.0%) and Germany (1.9% to 1.8%). It remained flat in USA at 1.9% and Japan at 1.0%. In Australia, the rate decreased from 4.2% to 3.8%. This is reflected in the market price changes for both portfolio debt securities liabilities (-$0.9b) and assets ($3.1b) in December quarter 2011.

The Australian dollar appreciated against a number of the major currencies in December quarter 2011. It increased 8.8% against the Euro, 8.7% against the Swiss franc, 5.1% against the Japanese yen, 5.1% against the UK pound sterling, 3.8% against the US dollar, 3.0% against the New Zealand dollar, 2.6% against the Chinese renminbi and 2.0% against the Canadian dollar. The Trade Weighted Index (TWI) rose 4.7%. The net impact of exchange rates was a decrease of $36.3b on foreign assets and $26.8b on foreign liabilities.


RELATIONSHIP BETWEEN IPD, EPI AND IPI(footnote 1)

In original terms, the IPD for total goods credits fell 2.7% and the chain Laspeyres price index for goods exports fell 2.5%. The export price index (EPI) fell 1.5% during the December quarter 2011.

In original terms, the IPD for total goods debits rose 2.3% and the chain Laspeyres price index for goods imports rose 2.5%. The import price index (IPI) rose 2.5% during the December quarter 2011.

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 the December quarter 2011, the difference between the IPD and EPI were mainly due to the 'wool and sheepskins', 'metal ores and minerals' and 'cereal grains and cereal preparations' components.

GOODS AND SERVICES, Price comparison - December Quarter 2011

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

Exports
Goods
-2.3
-2.7
-1.5
-2.5
Services
0.5
0.5
na
0.6
Imports
Goods
3.5
2.3
2.5
2.5
Services
1.2
1.3
na
1.3

na not available
(a) 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 2) (average monthly index) for rural commodities decreased 2.8% between the September quarter 2011 and December quarter 2011 quarters while the EPI for rural goods total decreased 1.7%.

The RBA Commodity Price Index for non-rural commodities decreased 3.0% while the EPI for non-rural goods total (excluding non-monetary gold) decreased 1.8%.

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.


CALENDAR YEAR 2011 SITUATION


CURRENT ACCOUNT

In original terms, the balance on current account for 2011 was a deficit of $32.0b, a 17% decrease on the deficit of $38.5b recorded for 2010. The balance on goods and services surplus was a record high at $18.2b, an increase of $2.9b (19%) on the surplus of $15.3b recorded in 2010. Goods credits increased $31.5b (14%) and goods debits increased $22.8b (11%).

The 2011 services deficit of $9.8b was an increase of $5.8b on the deficit of $4.0b in 2010.

The 2011 primary income deficit decreased $3.2b (6%), with an increase in primary income credits of $2.5b (6%) and a decrease in primary income debits of $0.7b (1%).

The 2011 secondary income deficit decreased $0.4b (47%), with an increase in secondary income credits of $0.5b (8%) and an increase in secondary income debits of $0.1b (1%).


FINANCIAL ACCOUNT

The balance on financial account recorded a net inflow of $31.3b, with a net inflow on debt of $27.0b and a net inflow on equity of $4.4b. This result was down $7.2b on the net inflow of $38.5b recorded for the previous year as a result of:
  • a decrease of $51.6b on the net inflow on portfolio investment
  • an increase of $26.4b on the net outflow on financial derivatives
  • an increase of $3.6b on the net outflow on reserve assets
  • an increase of $42.1b on the net inflow on direct investment
  • a decrease of $32.3b on the net outflow on other investment.


INTERNATIONAL INVESTMENT POSITION

Australia's net international investment position as at 31 December 2011 was a net foreign liability of $854.7b. This was up $79.6b (10%) on the position a year earlier as a result of:
  • exchange rate changes of $33.4b
  • net transactions of $31.3b
  • price changes of $16.6b
  • other changes of -$1.8b.

During 2011, Australia's net foreign equity liability decreased to $119.3b, down $7.3b (6%) on the previous calendar year, with price changes of -$17.7b and other changes of -$3.3b partially offset by exchange rate changes of $9.3b and net transactions of $4.4b.

Australia's net foreign debt liability rose to $735.4b, up $86.9b (13%) on the previous calendar year, with price changes of $34.3b, net transactions of $27.0b, exchange rate changes of $24.1b and other changes of $1.6b.

At 31 December 2011, the ratio of Australia's net international investment position to GDP using the latest available GDP figure (for the year ended 30 September 2011 using current prices) was 60.1%. This compares with 57.1% one year ago and 46.7% one decade ago.

1 In this commentary movements in indexes are based on data to four decimal places. <back
2 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.