Import demand narrows the current account surplus

Media Release

Australia's current account surplus decreased by $5.7 billion to $7.5 billion (seasonally adjusted) in the March quarter 2022, according to latest figures from the Australian Bureau of Statistics (ABS).

Balance of Payments components

The current surplus narrowed for the third consecutive quarter and was the lowest since December quarter 2019. The fall in the current account surplus was driven by a $4.9 billion widening of the net primary income deficit and a fall of $0.9 billion in the balance on goods and services surplus.

Head of International Statistics at the ABS, Andrew Tomadini, said: "While the Current Account Surplus narrowed to $7.5b in the quarter, Australia recorded its twelfth consecutive Current Account Surplus – the longest consecutive period of current account surpluses since the 1970s.”

Imports of goods and services increased 12 per cent with rises across a range of categories including Intermediate and other merchandise goods, supported by increased domestic demand for COVID-19 rapid antigen tests. Consumption goods also contributed to the rise reflecting continued domestic demand, consistent with record levels of retail trade turnover.

Exports of goods and services rose 9 per cent with exports of Metal ores and minerals and Coal, coke and briquettes the main drivers as commodity prices surged to record levels and global demand remained high.

Mr Tomadini added “The rise in the net primary income deficit reflected higher dividend payments to non-residents as profits continued to rise on the back of higher commodity prices.”

(a) Seasonally adjusted estimates at current prices.

The financial account deficit decreased by $8.6 billion to $2.7 billion in the March quarter 2022. This was driven by a net outflow of debt of $3.6 billion and a net inflow of equity of $0.9 billion. Despite the relatively flat net equity flows, there were record offsetting transactions on the asset and liability side because of several large mergers and acquisitions during the quarter.

(a) Trend series is not published from June Quarter 2019

(b) Seasonally adjusted

Contribution to Gross Domestic Product

The fall in the balance on goods and services surplus of $8.9 billion (Seasonally adjusted chain volume measure) is expected to detract 1.7 percentage points from the March quarter 2022 GDP quarterly movement.

International Investment Position (IIP)

Australia's net IIP liability position was $821.3b at March quarter 2022, an increase of $11.6b on the revised 31 December 2022 position of $809.7b.

Australia's net foreign equity asset position decreased $88.4b to $307.4b at March quarter 2022. Australia's net foreign debt liability position increased $76.8b to $1,128.7b.

Media notes

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