Australia's current account surplus narrows

Media Release

Released

1/03/2022

Source

Balance of Payments and International Investment Position, Australia, December 2021

Australia's current account surplus decreased by $9.3 billion to $12.7 billion (seasonally adjusted) in the December quarter 2021, according to latest figures from the Australian Bureau of Statistics (ABS).

Balance of Payments components

The decrease in the current account surplus was driven by a fall of $6.4 billion in the balance on goods and services surplus. Exports of goods and services fell $1.5 billion (1 per cent), while imports rose $4.9 billion (5 per cent). The net primary income deficit rose by $2.7 billion to $17.5 billion in the December quarter 2021.

Head of International Statistics at the ABS, Andrew Tomadini, said: "The decrease in the Current Account surplus was driven by weaker exports of non-rural goods, while imports of intermediate goods rose."

Exports of metal ores and minerals fell 28 per cent as key import markets cut production. Offsetting this fall was an increase in exports of coal (39 per cent) and other mineral fuels (25 per cent) and cereals and grains (30 per cent). Imports of fuels and lubricants rose 16 per cent, coinciding with easing travel restrictions and an increase in domestic travel.

"Supply chain disruptions, shipping constraints and a sharp increase in freight costs continued to impact trade this quarter," Mr Tomadini said.

Graph 1: Current account balance (a), main aggregates
	Current account balance ($b)	Net goods & services ($b)	Net primary income ($b)
Dec-17	-14.9	-0.3	-14.3
Mar-18	-12.2	1.9	-14.0
Jun-18	-13.6	2.2	-15.6
Sep-18	-9.4	7.1	-16.2
Dec-18	-5.4	10.5	-15.7
Mar-19	-4.1	11.9	-15.6
Jun-19	3.9	18.2	-14.5
Sep-19	8.2	21.8	-13.4
Dec-19	4.1	16.5	-12.1
Mar-20	7.3	17.3	-9.7
Jun-20	16.5	21.6	-4.5
Sep-20	10.2	13.9	-3.1
Dec-20	17.0	19.9	-2.2
Mar-21	19.8	25.9	-5.6
Jun-21	22.4	30.5	-6.7
Sep-21	22.0	37.4	-14.7
Dec-21	12.7	31.0	-17.5

Graph 1: Current account balance (a), main aggregates

["","Current account balance","Net goods & services","Net primary income"]

[["Dec-17","Mar-18","Jun-18","Sep-18","Dec-18","Mar-19","Jun-19","Sep-19","Dec-19","Mar-20","Jun-20","Sep-20","Dec-20","Mar-21","Jun-21","Sep-21","Dec-21"],[[-14.882999999999999],[-12.159000000000001],[-13.576000000000001],[-9.4120000000000008],[-5.383],[-4.0720000000000001],[3.851],[8.2100000000000009],[4.101],[7.3220000000000001],[16.524999999999999],[10.185],[16.986000000000001],[19.77],[22.405000000000001],[21.981000000000002],[12.677]],[[-0.28199999999999997],[1.919],[2.1869999999999998],[7.1230000000000002],[10.525],[11.891],[18.245000000000001],[21.782],[16.530000000000001],[17.257000000000001],[21.641999999999999],[13.871],[19.864999999999998],[25.866],[30.475999999999999],[37.399999999999999],[31.001000000000001]],[[-14.313000000000001],[-14.02],[-15.586],[-16.204000000000001],[-15.728999999999999],[-15.574999999999999],[-14.521000000000001],[-13.379],[-12.122],[-9.7249999999999996],[-4.508],[-3.097],[-2.1499999999999999],[-5.6479999999999997],[-6.7130000000000001],[-14.742000000000001],[-17.460999999999999]]]

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(a) Seasonally adjusted estimates at current prices.

The net income deficit grew $2.7 billion, driven by increased income flows to non-residents as a result of strength in commodity prices. Strong dividend payments were recorded for portfolio investment income with improved operating profits flowing through to direct investment income.

The financial account deficit decreased by $8.9 billion to $6.3 billion in the December quarter 2021. This was driven by a net outflow of equity of $30.3 billion and a net inflow of debt of $24 billion.

Graph 2: Net primary income deficit (a)
	Primary income credits ($b)	Primary income debits ($b)	Net primary income ($b)
Dec-13	12.3	-23.1	-10.8
Mar-14	12.6	-23.7	-11.1
Jun-14	12.5	-21.6	-9.1
Sep-14	13.8	-22.1	-8.3
Dec-14	13.2	-21.0	-7.8
Mar-15	13.3	-21.1	-7.8
Jun-15	13.1	-22.1	-9.0
Sep-15	12.7	-23.3	-10.6
Dec-15	13.5	-23.6	-10.1
Mar-16	12.9	-21.1	-8.2
Jun-16	13.2	-23.4	-10.2
Sep-16	13.2	-22.6	-9.4
Dec-16	14.0	-26.3	-12.3
Mar-17	13.8	-26.5	-12.7
Jun-17	14.0	-27.5	-13.5
Sep-17	13.9	-27.6	-13.7
Dec-17	14.4	-28.8	-14.3
Mar-18	15.1	-29.1	-14.0
Jun-18	16.1	-31.7	-15.6
Sep-18	17.1	-33.4	-16.2
Dec-18	17.4	-33.1	-15.7
Mar-19	18.5	-34.1	-15.6
Jun-19	17.8	-32.3	-14.5
Sep-19	17.7	-31.0	-13.4
Dec-19	17.9	-30.1	-12.1
Mar-20	17.9	-27.6	-9.7
Jun-20	15.2	-19.8	-4.5
Sep-20	16.5	-19.6	-3.1
Dec-20	15.2	-17.4	-2.2
Mar-21	17.0	-22.7	-5.6
Jun-21	17.0	-23.8	-6.7
Sep-21	19.1	-33.9	-14.7
Dec-21	20.8	-38.2	-17.5

Graph 2: Net primary income deficit (a)

["","Primary income credits","Primary income debits","Net primary income"]

[["Dec-13","Mar-14","Jun-14","Sep-14","Dec-14","Mar-15","Jun-15","Sep-15","Dec-15","Mar-16","Jun-16","Sep-16","Dec-16","Mar-17","Jun-17","Sep-17","Dec-17","Mar-18","Jun-18","Sep-18","Dec-18","Mar-19","Jun-19","Sep-19","Dec-19","Mar-20","Jun-20","Sep-20","Dec-20","Mar-21","Jun-21","Sep-21","Dec-21"],[[12.300000000000001],[12.6],[12.5],[13.800000000000001],[13.199999999999999],[13.300000000000001],[13.1],[12.699999999999999],[13.5],[12.9],[13.199999999999999],[13.199999999999999],[14],[13.800000000000001],[14],[13.9],[14.4],[15.1],[16.100000000000001],[17.100000000000001],[17.399999999999999],[18.5],[17.800000000000001],[17.699999999999999],[17.899999999999999],[17.899999999999999],[15.199999999999999],[16.5],[15.199999999999999],[17],[17],[19.100000000000001],[20.800000000000001]],[[-23.100000000000001],[-23.699999999999999],[-21.600000000000001],[-22.100000000000001],[-21],[-21.100000000000001],[-22.100000000000001],[-23.300000000000001],[-23.600000000000001],[-21.100000000000001],[-23.399999999999999],[-22.600000000000001],[-26.300000000000001],[-26.5],[-27.5],[-27.600000000000001],[-28.800000000000001],[-29.100000000000001],[-31.699999999999999],[-33.399999999999999],[-33.100000000000001],[-34.100000000000001],[-32.299999999999997],[-31],[-30.100000000000001],[-27.600000000000001],[-19.800000000000001],[-19.600000000000001],[-17.399999999999999],[-22.699999999999999],[-23.800000000000001],[-33.899999999999999],[-38.200000000000003]],[[-10.800000000000001],[-11.1],[-9.0999999999999996],[-8.3000000000000007],[-7.7999999999999998],[-7.7999999999999998],[-9],[-10.6],[-10.1],[-8.1999999999999993],[-10.199999999999999],[-9.4000000000000004],[-12.300000000000001],[-12.699999999999999],[-13.5],[-13.699999999999999],[-14.300000000000001],[-14],[-15.6],[-16.199999999999999],[-15.699999999999999],[-15.6],[-14.5],[-13.4],[-12.1],[-9.6999999999999993],[-4.5],[-3.1000000000000001],[-2.2000000000000002],[-5.5999999999999996],[-6.7000000000000002],[-14.699999999999999],[-17.5]]]

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(a) Seasonally adjusted

Contribution to Gross Domestic Product

The fall in the balance on goods and services surplus of $0.8 billion (Seasonally adjusted chain volume measure) is expected to detract 0.2 percentage points from the December quarter 2021 GDP quarterly movement.

International Investment Position (IIP)

Australia's net IIP liability position was $809.4b at December quarter 2021, a decrease of $69.2b on the revised September quarter position of $878.6b.

Australia's net foreign equity asset position increased $66.3 billion to $395.5 billion at December quarter 2021. Australia's net foreign debt liability position decreased $2.9 billion to $1,204.9 billion.

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).
December quarter 2021, Australian National Accounts: National Income, Expenditure and Product (cat. no. 5206.0) will be released on 2 March 2022.
When reporting ABS data you must attribute the Australian Bureau of Statistics (or the ABS) as the source.
For media requests and interviews, contact the ABS Media Team via media@abs.gov.au (8.30am-5pm Mon-Fri).
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