5302.0 - Balance of Payments and International Investment Position, Australia, Sep 2003
ARCHIVED ISSUE Released at 11:30 AM (CANBERRA TIME) 01/12/2003
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BALANCE OF PAYMENTS
INTERNATIONAL INVESTMENT POSITION
CHANGES IN THIS ISSUE
The seasonally adjusted and trend estimates of the current account have been revised as a result of the annual seasonal reanalysis which takes account of additional data that have become available since the previous reanalysis. Revised historical and new forward seasonal factors are available in the electronic version of this publication (see 5302.0, Table 95, for quarterly seasonal factors). Existing subscription clients to this data service should contact Kevin Yeadon on 02 6252 6255 or email firstname.lastname@example.org.
Table 41 summarises revisions, in original current price terms, since the last issue of this publication, for the last three years and six quarters.
Incorporation of the latest survey and administrative data has resulted in revisions to the current account back to September quarter 2001, decreasing the 2002-03 current account deficit by $1,399m. A significant contribution to these revisions was made by the upward revision to travel services. This is the result of the incorporation of overseas arrivals data derived from international airline passenger card information supplied by the Department of Immigration and Multicultural and Indigenous Affairs after a considerable delay. The financial account and international investment position have been revised back to September quarter 2002, increasing Australia's net IIP liability as at 30 June 2003 by $1b.
This issue contains a feature article, Foreign Ownership of Equity (pages 12-18), which updates the analysis of foreign ownership of equity last published in the September 2002 issue.
CHANGES IN FORTHCOMING ISSUES
A number of significant changes to the format and content of this publication will be introduced with the December quarter 2003 issue. These changes include the deletion of some tables, the addition of a table and changes to the format and content of other tables. As a consequence, the numbering of some tables will change. All data currently available from Ausstats and Time Series Spreadsheets will continue to be available.
A detailed explanation of the changes together with a mock-up of the revised publication will be available on the ABS on this website from 15 December 2003. From the Home page select Themes, then Finance and scroll down to the What's New heading.
For further information contact Tom Jebbink on 02 6252 6688 for balance of payments estimates, or Sawbhag Naidu on 02 6252 5541 for international investment estimates.
BALANCE OF PAYMENTS
The trend estimate of the balance on current account for the September quarter 2003 was a deficit of $12,343m, an increase of $729m (6%) on the deficit recorded for the June quarter 2003. The main contributor to the increase in the deficit was goods credits, which fell $1,257m, partially offset by a fall in goods debits of $550m.
In seasonally adjusted terms, the current account deficit fell $365m to $11,944m in the September quarter 2003. The net deficit on goods fell $284m (4%) to $6,092m. The net services deficit fell $153m to $232m. The net deficit on income rose $69m (1%) to $5,561m.
GOODS AND SERVICES
The trend estimate of the balance on goods and services at current prices was a deficit of $6,763m, an increase of $751m (12%) on the June quarter 2003 deficit of $6,012m.
In seasonally adjusted current price terms, the balance on goods and services was a deficit of $6,324m. The deficit on goods was $6,092m, a decrease of $284m on the deficit of $6,376m in the June quarter 2003. Lower goods imports, down $788m, were partly offset by lower goods exports, down $504m. Goods debits recorded decreases in most commodity groups, with intermediate and other merchandise goods down $632m (5%), consumption goods down $232m (2%) and capital goods down $103m (1%). The fall in goods credits was driven by falls in non-rural goods, down $757m (4%), and rural goods, down $21m, partly offset by a rise in other goods, up $274m (14%).In seasonally adjusted volume terms, the deficit on goods and services was $9,445m, an increase of $862m on the $8,583m deficit recorded for the June quarter 2003. The goods deficit rose $562m to $7,958m as goods debits rose $472m (1%) and goods credits fell $90m. The net services balance was a deficit of $1,487m, a $300m increase on the June quarter 2003 deficit of $1,187m.
The increase of $862m in the deficit on goods and services in volume terms could be expected to make a contribution to growth of -0.5 percentage points in the September quarter 2003 volume measures of GDP, assuming no significant revision to the GDP chain volume estimate for the June quarter 2003.
The trend estimate of goods credits fell $1,257m (5%) to $26,287m in the September quarter 2003. Seasonally adjusted, goods credits were $26,344m, down $504m (2%) on the June quarter 2003.
Non-rural goods (seasonally adjusted, current prices) fell $757m (4%) to $18,838m. Both volumes and prices fell by 2%. Exports of other non-rural goods (including sugar) recorded the largest decrease, down $228m (10%), with volumes down 6% and prices down 4%; followed by metals (excluding non-monetary gold), down $171m (9%), with volumes down 11% while prices rose 2%; and coal, coke and briquettes, down $153m (6%), with volumes down 1% and prices down 4%.
Rural goods (seasonally adjusted, current prices) fell $21m to $5,289m, with volumes up 2% while prices fell 3%. The largest falls were in cereal grains and cereal preparations, down $83m (10%), with volumes down 2% and prices down 8%, and in meat and meat preparations, down $58m (5%), with volumes down 4% and prices down 1%. These falls were largely offset by rises in other rural goods, up $65m (3%), due to increased volumes, and in wool and sheepskins, up $55m (9%), with volumes up 14% while prices fell 5%.Other goods recorded an increase, up $274m (14%), driven by goods for processing, up $201m, and non-monetary gold, up $80m.
The trend estimate of goods debits fell $550m to $32,771m in the September quarter 2003. In seasonally adjusted current price terms, goods debits fell $788m (2%) to $32,436m.
Intermediate goods and other merchandise goods (seasonally adjusted, current prices) fell $632m (5%) to $13,081m, driven by a fall in prices of 5%. The largest fall was in fuels and lubricants, down $286m (11%), with volumes down 7% and prices down 5%; followed by processed industrial supplies n.e.s., down $171m (6%), with volumes down 2% and prices down 3%; organic and inorganic chemicals, down $110m (14%), on decreased volumes; and plastics, down $76m (12%) with volumes down 5% and prices down 8%.
Consumption goods imports (seasonally adjusted, current prices) fell $232m (2%) to $10,230m, with a rise in volumes of 1% and a fall in prices of 3%. This decrease was driven by textiles, clothing and footwear, down $127m (9%), with volumes down 4% and prices down 5%, food and beverages, mainly for consumption, down $67m (5%), with volumes down 1% and prices down 4%, and non-industrial transport equipment, down $42m (1%) on decreased prices.
Capital goods imports (seasonally adjusted, current prices) fell $103m (1%) to $7,754m, with a rise in volumes of 2% and a fall in prices of 3%. This decrease was driven by machinery and industrial equipment, down $85m (3%), due to a fall in prices, and telecommunications equipment, down $61m (6%), with volumes down 1% and prices down 5%. Partly offsetting these decreases was a rise in capital goods n.e.s., up $79m (8%), with volumes up 12% and prices down 4%.
The trend estimate of net services was a deficit of $279m, up $44m on the June quarter 2003 deficit. In seasonally adjusted terms, net services recorded a deficit of $232m, a decrease of $153m on the deficit for the June quarter 2003.
Services credits, in seasonally adjusted terms at current prices, rose $740m (10%) to $8,066m, due mainly to an increase in volumes. Services debits, in seasonally adjusted terms at current prices, rose $587m (8%) to $8,298m, with prices down 4% and volumes up 11%. The largest increases in both services credits and debits were in passenger and travel services, largely due to increased international travel after the reduced levels in June quarter 2003 following the SARS travel warnings.
IMPLICIT PRICE DEFLATOR
In seasonally adjusted terms, the implicit price deflator (IPD) for total goods and services credits fell 0.8%. In original terms, it fell by 1.1%. The chain Laspeyres price index for goods and services credits fell 1.0%, indicating that the compositional effects had a small downward influence on the movement in the IPD. The IPD for goods credits fell 2.0% and the IPD for services credits rose 0.7%.
The total goods and services debits IPD fell 3.5% in seasonally adjusted terms. In original terms, it fell by 3.2%. The chain Laspeyres price index for debits fell 3.3%, indicating that compositional effects had a small upward influence on the movement in the IPD.
RELATIONSHIP TO IPI AND EPI
The goods export IPD (in original terms) fell 2.0% while the chain Laspeyres price index for goods exports fell 1.4% and the exports price index (EPI) fell 2.8% during the September quarter 2003.
During the September quarter 2003, the goods imports IPD (in original terms) fell 3.5% and the chain Laspeyres price index for goods imports also fell 3.5%. The import price index (IPI) fell 3.4%.
TERMS OF TRADE
Australia's seasonally adjusted terms of trade rose 2.8% to 105.9, with a fall of 0.8% in the IPD for goods and services credits and a 3.5% decrease in the goods and services debits IPD. The trend estimate of the terms of trade increased 1.0% to 104.8.
The trend estimate of the net income deficit fell $20m to $5,529m.
In seasonally adjusted terms, the net income deficit rose $69m (1%) to $5,561m. Income credits fell $57m to $3,607m and income debits rose $12m to $9,168m.
In original terms, income credits fell $84m (2%) to $3,521m and income debits rose $302m (3%) to $9,402m.
In seasonally adjusted terms, net current transfers was a deficit of $59m, up $3m on the $56m deficit recorded in the June quarter 2003. Current transfer credits fell $1m and debits rose $2m.
CAPITAL AND FINANCIAL ACCOUNT
In original terms, the capital account surplus was $330m, up $102m on the June quarter 2003 surplus. Capital transfer credits rose $92m (16%) to $674m, while capital transfer debits fell $28m (8%) to $314m.
In original terms, the balance on financial account recorded a net inflow of $12.0b, made up of a net $5.4b inflow on equity and a net $6.6b inflow on debt.
Direct investment in Australia recorded a net inflow of $6.2b in the September quarter 2003, a $0.5b increase on the June quarter inflow of $5.7b. Australia's direct investment abroad recorded an outflow of $1.0b, down from the previous quarter's outflow of $3.9b. This is the eleventh consecutive quarterly outflow, bringing the total outflow on Australia's direct investment abroad to $43.9b since the March quarter 2001.
Portfolio investment recorded a net inflow of $18.5b, an increase of $5.5b on the net inflow in the June quarter 2003.
Other investment recorded a net outflow of $12.8b, a turnaround of $18.2b on the net inflow of $5.5b recorded in the June quarter 2003.
Reserve assets recorded a net inflow of $0.5b, due to a decrease in foreign exchange reserves. This is a turnaround of $10.1b on the outflow of $9.6b recorded in the previous quarter.
INTERNATIONAL INVESTMENT POSITION
Australia's net international investment position at 30 September 2003 was a net foreign liability of $453b, up $10b on 30 June 2003. The increase consisted of:
During the September quarter 2003, the level of net equity liabilities rose $8b (9%) to $92b, reflecting new equity raisings of $5b, price changes of $3b and exchange rate changes of $1b. This increase was partially offset by other changes of -$1b.
During the September quarter 2003, the level of net debt liabilities rose $2b (1%) to $361b. New debt raising contributed $7b to the increase. This was partially offset by exchange rate changes of -$2b, other adjustments of -$1b and price changes of -$1b.
As at 30 September 2003, the ratio of Australia's net IIP to GDP using the latest available GDP (for the year ending 30 June 2003) was 60.2%. This compares with 58.0% one year ago and 54.4% a decade ago.
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