Australia's current account drops $7.6b to deficit of $4.9b

Media Release

Australia’s current account balance fell by $7.6 billion to a deficit of $4.9 billion in the March quarter 2024 (seasonally adjusted, current prices), according to figures released today by the Australian Bureau of Statistics (ABS). 

Grace Kim, ABS head of International Statistics, said: “The current account deficit reflects a smaller trade surplus, driven by a rise in the imports of goods, while the net primary income deficit increased.” 

The balance on goods and services fell $6.1 billion to $17.8 billion, and the net primary income deficit rose $1.5 billion to $22.3 billion. 

Australia’s terms of trade rose 0.2 per cent but was down 7.3 per cent through the year. The quarterly rise in the terms of trade reflects a steeper fall in import prices (-2.0 per cent) relative to the fall in export prices (-1.8 per cent). 

“The prices of goods exports fell, led by metal ores prices, after a rise in the December quarter. The price of exported goods was 10.3 per cent lower compared to this time last year,” Ms Kim said. 

Imports of goods rose 4.5 per cent driven by Consumptions goods, reflecting a broad increase in the global supply of goods like medicines, clothing and footwear. Australia also imported more fertilizers after weather events impacted domestic supply. 

Imports of services fell for the second consecutive quarter (-1.8 per cent), as Australians spent less travelling overseas and continued to visit closer overseas destinations.

Exports of goods fell 1.5 per cent, reflecting reduced domestic production of Coal and Iron ore. Exports of Other rural goods also contributed to the fall driven by cotton reflecting low harvest yields. 

Exports of services rose by 0.6 per cent, led by Travel services as more tourists travelled to Australia, coinciding with large music events including Taylor Swift and Pink concerts.  A smaller-than-average rise in students coming to Australia to study partly offset the rise from tourism. 

(a) seasonally adjusted estimates at current prices

The primary income deficit ($22.3 billion) widened for only the second time since June quarter 2022. A rise in primary income debits (outflows) drove this result, due to higher profits on foreign direct investment, mainly in liquid natural gas (LNG) and industrial real estate. Higher LNG prices contributed to larger first quarter profits. 

(a) seasonally adjusted estimates at current prices

The financial account had a surplus of $8.3 billion, driven by net inflows of equity (+$15.3 billion) and partly offset by net outflows of debt (-$7.0 billion). 

Australia's net international investment liability position of $730.3 billion narrowed to its lowest level since June quarter 2009, a drop of $103.9 billion. The rise in Australia's foreign assets grew faster than the rise in foreign liabilities. 

“The narrowing of Australia’s international investment liability position reflected a large rise in Australia’s foreign equity assets as Australian investors benefitted from rising values in international share markets,” Ms Kim added. 

Australia's net foreign equity asset position rose by $131.8 billion to $505.5 billion - its largest on record. 

Australia’s net foreign debt liability position grew by $27.9 billion to $1,235.7 billion reflecting the depreciation of the Australian dollar.

The $5.5 billion fall in net trade (seasonally adjusted, chain volume measure) is expected to detract 0.9 percentage points from the March quarter 2024 Gross Domestic Product (GDP) movement.

Media notes

  • For a definition of chain volume measures, please see the Glossary on the Methodology page of Balance of Payments and International Investment Position, Australia (cat. no. 5302.0).
  • March quarter 2024, Australian National Accounts: National Income, Expenditure and Product (cat. no. 5206.0) will be released on 5 June 2024.
  • The extra leap year day in 2024 is unlikely to impact seasonally adjusted statistics released by the Australian Bureau of Statistics (ABS) for the month of February 2024 and the March quarter 2024.  This is because the impact of an additional leap year day is analysed as part of the seasonal adjustment process, which includes the impact of trading days. The impact of the extra leap year day will be evident in the original (non-seasonally adjusted) series. For further information please refer to this note
  • When reporting ABS data you must attribute the Australian Bureau of Statistics (or the ABS) as the source.
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