Current account deficit widens

Australia’s current account balance fell by $2.8 billion in December quarter 2025 (current prices, seasonally adjusted) to a deficit of $21.1 billion, according to figures released today by the Australian Bureau of Statistics (ABS). 

Jonathon Khoo, ABS head of international statistics, said: ‘The current account balance recorded its second consecutive fall, as the net primary income deficit widened by $2.5 billion.’

The wider primary income deficit was due to a $1.6 billion rise in primary income paid to overseas investors, driven by stronger dividends paid by Australian firms. Adding to this was a decrease of $0.9 billion in income received from Australian investment overseas. 

The $1.3 billion surplus on goods and services remained steady for the December quarter 2025, as export growth was fully offset by import growth. 

‘The goods and services surplus was down from its peak of $41.3 billion in the June quarter 2022 and is no longer a significant offset to Australia’s net primary income deficit of $21.7 billion.’ Mr Khoo said.

Imports of goods rose 4.2 per cent and exports of goods rose 3.4 per cent, both driven by Non-monetary gold. Gold prices continued to reach historic highs, marking the ninth quarterly rise in a row across both imports and exports. 

Imports of goods and services rose 3.3 per cent in the quarter. 

Imports of Telecommunications equipment supported the rise, up 16.6 per cent, following record imports of smartphones, driven by quality improvements in the newly released smartphone models. 

Imports of Parts for Transport equipment also rose by 9.1 per cent, led by higher demand for lithium batteries coinciding with the federal government home battery rebate announcement.

Exports of goods and services rose 3.2 per cent in the quarter. 

Exports of Metal ores and minerals were up for the second quarter in a row, driven by iron ore with continued demand from China.

Exports of services rose 2.6 per cent this quarter, led by a rise in Travel services. 

‘Travel rose by 1.9 per cent, with more tourists travelling to Australia coinciding with various sporting events and concerts during the quarter,’ Mr Khoo said. 

The financial account showed a surplus of $8.4 billion, driven by net inflows of debt (+$45.2 billion) and partly offset by net outflows of equity (+$36.8 billion).  

‘Australia’s financial account surplus was driven by strong demand by overseas investors for Australian debt as overseas investors acquired $45.6b of Australian issued debt securities,’ Mr Khoo said. 

‘This was partly offset by the largest recorded quarterly purchase of overseas portfolio equity by Australians, as Australian superannuation funds continued to increase their investment in overseas markets over the course of 2025.’

Australia’s net foreign debt liability position rose $46.9 billion to $1.48 trillion. 

Australia's net foreign equity asset position rose by $72.1 billion to $842.7 billion, driven by the acquisition of foreign portfolio equity.

The $0.6 billion fall in net trade (seasonally adjusted, chain volume measure) is expected to detract 0.1 percentage points from the December quarter 2025 Gross Domestic Product (GDP) movement.