Australia's current account surplus hits a record high $18.3b

Media Release

Australia's current account surplus in seasonally adjusted terms increased $2.3 billion to a record $18.3 billion in the March quarter 2021 according to latest figures from the Australian Bureau of Statistics (ABS). 

Balance of Payments components

The current account surplus reached another record high in the March quarter 2021, driven by a record $5.2 billion increase in the balance on goods and services surplus. Exports of goods and services rose $7.8 billion (7 per cent), while imports of goods and services rose $2.6 billion (3 per cent). The net primary income deficit rose by $3.1 billion to $6.0 billion in the March quarter 2021.

Head of International Statistics at the ABS, Andrew Tomadini said: "Australia's record Current Account this quarter came on the back of strong commodity prices, particularly iron ore. Metal ores and mineral exports reached its highest value on record, $48.2 billion in March quarter 2021. Favourable weather conditions domestically and solid demand internationally saw the exports of rural goods remain strong through the quarter. Imports grew in March quarter 2021 as previous supply delays in 2020 eased throughout the quarter".

The financial account deficit increased by $4.7b to $15.2b in the March quarter 2021. It was mainly due to the increase in foreign equity purchases by Australian funds (see graph below), the decreases in debt issued abroad by Australian banks and foreign holdings of Australian Government debts. The impact of the financial account deficit and the corresponding valuation changes of -$60.2b, saw Australia's net IIP liability position decrease by $75.4b to $874.6b at March quarter 2021.

Contribution to Gross Domestic Product

In seasonally adjusted chain volume terms, the balance on goods and services surplus decreased $3.0 billion, narrowing the surplus to $10.0 billion. Assuming no significant revision to December quarter 2020 estimates of GDP, the balance on goods and services is expected to detract 0.6 percentage points from March quarter 2020 Gross Domestic Product.

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