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Balance of Payments and International Investment Position, Australia

Balance of payments on capital and financial transactions plus an international investment statement detailing level of investment and income

Reference period
December 2019
Released
3/03/2020

Key statistics

  • Australia's net IIP liability position decreased $83.4b.
  • Australia's net foreign debt liability position decreased $20.9b.
  • Australia's net foreign equity asset position increased $62.6b.
  • The balance on goods and services surplus rose $531m.

Main features

Balance of payments

  • The current account surplus, seasonally adjusted, fell $5,548m to $955m in the December quarter 2019. The balance on goods and services surplus fell $6,021m to $13,893m. The primary income deficit fell $626m to $12,498m.
  • In seasonally adjusted chain volume terms, the surplus on goods and services rose $531m from $8,418m in the September quarter 2019 to $8,949m in the December quarter 2019. This is expected to contribute 0.1 percentage points to growth in the December quarter 2019 volume measure of GDP.
     

International investment position (IIP)

  • Australia's net IIP liability position was $891.5b at 31 December 2019, a decrease of $83.4b on the revised 30 September 2019 position of $974.9b. Australia's net foreign debt liability position decreased $20.9b to $1,143.5b. Australia's net foreign equity asset position increased $62.6b to $252.1b at 31 December 2019.
     
   Sep Qtr 2019Dec Qtr 2019Sep Qtr 2019 to Dec Qtr 2019
   $m$m% change
BALANCE ON CURRENT ACCOUNT   
 Trend estimates
4 785
4 017
-16
 Seasonally adjusted
6 503
955
-85
BALANCE ON GOODS AND SERVICES   
 Trend estimates
18 520
16 896
-9
 Seasonally adjusted
19 914
13 893
-30
NET PRIMARY INCOME   
 Trend estimates
-13 488
-12 542
7
 Seasonally adjusted
-13 124
-12 498
5
LEVELS AT END OF PERIOD   
 International Investment Position
974 925
891 482
-9
  Net foreign equity
-189 476
-252 064
-33
  Net foreign debt
1 164 402
1 143 546
-2
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  1. Seasonally adjusted estimates at current prices.
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Bushfires in December quarter

Quality assurance undertaken by the ABS confirmed that the bushfires did not result in quality impacts to Balance of Payments and International Investment Position for December quarter 2019. It is expected that the recent bushfires and COVID-19 virus will impact the Australian economy in the March quarter 2020. For more information please see the ABS Chief Economist Series paper Measuring natural disasters in the Australian economy.

Analysis and comments

Balance of payments

In original current price terms, the December quarter 2019 current account surplus was $1,845m, a fall of $1,402m on the September quarter 2019 surplus. In original current price terms, the balance on goods and services was a surplus of $13,969m, primary income was a deficit of $12,095m and secondary income was a deficit of $29m.

In original current price terms, the December quarter 2019 capital and financial account deficit was $1,833m, a fall of $3,869m on the September quarter 2019 deficit. In original current price terms, the capital account was a deficit of $179m and the financial account was a deficit of $1,654m.

The contributors to the current account balances, in original terms at current prices, are shown in the following table.

Balance of payments, summary(a): original

     Dec 2018Mar 2019Jun 2019Sep 2019Dec 2019
     $m$m$m$m$m
CURRENT ACCOUNT
-6 569
-1 086
6 295
3 247
1 845
 Goods and services
8 313
16 185
19 310
18 145
13 969
  Credits
118 146
116 913
123 462
127 537
125 099
  Debits
-109 833
-100 728
-104 152
-109 392
-111 130
   Goods
9 512
13 800
21 742
20 585
13 873
    Credits
93 487
90 366
100 444
102 535
98 494
    Debits
-83 975
-76 566
-78 702
-81 950
-84 621
   Services
-1 199
2 385
-2 432
-2 440
96
    Credits
24 659
26 547
23 018
25 002
26 605
    Debits
-25 858
-24 162
-25 450
-27 442
-26 509
 Primary income
-15 059
-16 566
-12 843
-14 732
-12 095
  Credits
17 832
18 072
17 530
17 019
17 926
  Debits
-32 891
-34 638
-30 373
-31 751
-30 020
 Secondary income
177
-705
-172
-166
-29
  Credits
2 442
2 406
2 497
2 447
2 413
  Debits
-2 265
-3 111
-2 669
-2 613
-2 442
CAPITAL AND FINANCIAL ACCOUNT
8 626
2 333
-3 659
-5 702
-1 833
 Capital account
-162
-200
-233
-169
-179
  Acquisitions/disposals of non-produced non-financial assets
33
3
2
-4
1
   Credits
63
3
2
-
2
   Debits
-30
-
-
-4
-1
  Capital transfers
-195
-203
-235
-165
-180
   Credits
-
-
-
-
-
   Debits
-195
-203
-235
-165
-180
 Financial account
8 788
2 533
-3 426
-5 533
-1 654
  Direct investment
35 262
5 054
26 641
13 716
-1 164
   Assets
22 101
-7 252
1 482
5 075
-10 379
   Liabilities
13 161
12 305
25 159
8 641
9 216
  Portfolio investment
-8 307
-23 572
-38 390
-6 625
19 239
   Assets
-24 649
-14 055
-26 304
-25 515
-15 903
   Liabilities
16 342
-9 516
-12 086
18 890
35 142
  Financial derivatives
-5 541
-658
-1 270
2 126
-3 263
   Assets
10 375
18 159
16 824
27 332
38 086
   Liabilities
-15 916
-18 817
-18 095
-25 206
-41 350
  Other investment
-13 950
23 555
6 601
-18 287
-7 463
   Assets
-5 520
17 480
-5 121
-20 420
3 494
   Liabilities
-8 430
6 074
11 722
2 133
-10 958
  Reserve assets
1 324
-1 846
2 992
3 538
-9 003
NET ERRORS AND OMISSIONS
-2 057
-1 246
-2 636
2 455
-12
- nil or rounded to zero (including null cells)
a. For sign conventions, see the Concepts section of the Explanatory notes.
   

In seasonally adjusted current price terms, the December quarter 2019 current account surplus was $955m, a fall of $5,548m on the September quarter 2019 surplus.

In trend current price terms, the December quarter 2019 current account surplus was $4,017m, a fall of $768m on the September quarter 2019 surplus.

The contributors to the current account balance, in seasonally adjusted and trend terms at current prices, are shown in the following table.

Balance on current account in current prices - December quarter 2019

    Change in:
   Current pricesCurrent pricesCurrent prices
   $m$m%
 
Seasonally Adjusted
Balance on current account
955
-5 548
-85
 Balance on goods and services
13 893
-6 021
-30
  Net goods
14 154
-6 256
-31
  Net services
-261
235
47
 Net primary income
-12 498
626
5
 Net secondary income
-440
-153
-53
 
Trend
Balance on current account
4 017
-768
-16
 Balance on goods and services
16 896
-1 624
-9
  Net goods
17 217
-1 788
-9
  Net services
-321
165
34
 Net primary income
-12 542
946
7
 Net secondary income
-337
-90
-36
.. not applicable
   

Terms of trade (footnote 1)

Australia's seasonally adjusted terms of trade on net goods and services for the December quarter 2019 fell 5.3% to 103.5, with a decrease of 4.5% in the implicit price deflator (IPD) for goods and services credits and an increase of 0.9% in the IPD for goods and services debits.

In trend terms, the terms of trade for net goods and services fell 2.0% to 105.9.

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  1. Seasonally adjusted, reference year 2017-18 = 100.
     

Balance on goods and services

In seasonally adjusted chain volume terms, the balance on goods and services was a surplus of $8,949m, a rise of $531m on the September quarter 2019 surplus of $8,418m.

The surplus on goods rose $102m on the September quarter 2019 surplus of $7,017m. Goods credits rose $1m and goods debits fell $101m. The surplus on services rose $427m on the September quarter 2019 surplus of $1,402m.

The rise in the balance on goods and services surplus, in seasonally adjusted chain volume terms, is expected to contribute 0.1 percentage points to growth in the December quarter 2019 chain volume measure of GDP, assuming no significant revision to the GDP chain volume estimate for the September quarter 2019.

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  1. Seasonally adjusted, reference year 2017-18.
     

Goods

The trend estimate of net goods at current prices for the December quarter 2019 was a surplus of $17,217m, a fall of $1,788m on the September quarter 2019 surplus of $19,005m.

In seasonally adjusted terms at current prices, net goods was a surplus of $14,154m, a fall of $6,256m on the September quarter 2019 surplus of $20,410m.

Goods, price and volume analysis: seasonally adjusted - December quarter 2019

  Change in:
 Current pricesCurrent pricesChain volume measures(a)Implicit price deflators(a)(b)
 $m%%%
Exports
-5 812
-5.8
-
-5.8
Rural goods
805
7.1
3.2
3.8
Non-rural goods
-5 128
-6.2
1.3
-7.4
Net exports of goods under merchanting
-23
-59.0
-55.7
-7.4
Non-monetary gold
-1 466
-19.4
-19.8
0.5
Imports
443
0.5
-0.1
0.7
Consumption goods
170
0.6
-0.2
0.9
Capital goods
512
2.7
1.9
0.8
Intermediate and other merchandise goods
1 049
3.2
2.1
1.1
Non-monetary gold
-1 287
-49.2
-49.6
0.8
- nil or rounded to zero (including null cells)
a. Reference year 2017-18.
b. Movements in indexes are based on data to four decimal places.
   

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Goods credits

The trend estimate of goods credits at current prices fell $1,370m (1%) to $97,831m in the December quarter 2019.

In seasonally adjusted terms at current prices, goods credits fell $5,812m (6%) to $95,254m, with prices down 6%.

Rural goods

Exports of rural goods, in seasonally adjusted terms at current prices, rose $805m (7%) to $12,164m, with volumes up 3% and prices up 4%.

The main components contributing to the rise were:

  • meat and meat preparations, up $414m (10%), with volumes up 3% and prices up 7%
  • other rural, up $207m (4%), with volumes up 2% and prices up 2%
  • cereal grains and cereal preparations, up $174m (13%), with volumes up 13%.
     

Non-rural goods

Exports of non-rural goods, in seasonally adjusted terms at current prices, fell $5,128m (6%) to $76,979m, with volumes up 1% and prices down 7%.

The main components contributing to the fall were:

  • metal ores and minerals, down $3,164m (9%), with volumes up 1% and prices down 10%
  • coal, coke and briquettes, down $1,928m (12%), with volumes up 3% and prices down 15%
  • other mineral fuels, down $552m (4%), with volumes down 2% and prices down 1%
  • other non-rural (incl. sugar and beverages), down $240m (9%), with volumes down 8%.


Partly offsetting these falls were:

  • machinery, up $292m (10%), with volumes up 11%
  • other manufactures, up $268m (4%), with volumes up 5%
  • transport equipment, up $210m (18%), with volumes up 17%.
     
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  1. Seasonally adjusted.
     

Net exports of goods under merchanting

Net exports of goods under merchanting, in seasonally adjusted terms at current prices, fell $23m (59%) to $16m, with volumes down 56% and prices down 7%.

Non-monetary gold

Exports of non-monetary gold, in original and seasonally adjusted terms at current prices, fell $1,466m (19%) to $6,095m, with volumes down 20% and prices up 1%.

Goods debits

The trend estimate of goods debits at current prices rose $419m (1%) to $80,615m in the December quarter 2019.

In seasonally adjusted terms at current prices, goods debits rose $443m (1%) to $81,099m, with prices up 1%.

Consumption goods

Imports of consumption goods, in seasonally adjusted terms at current prices, rose $170m (1%) to $26,598m, with prices up 1%.

The main components contributing to the rise were:

  • consumption goods n.e.s., up $206m (2%), with volumes up 1% and prices up 1%
  • household electrical items, up $78m (5%), with volumes up 5%.
     

Partly offsetting these rises was non-industrial transport equipment, down $144m (2%), with volumes down 3% and prices up 1%

Capital goods

Imports of capital goods, in seasonally adjusted terms at current prices, rose $512m (3%) to $19,503m, with volumes up 2% and prices up 1%.

The main components contributing to the rise were:

  • ADP equipment, up $367m (14%), with volumes up 15% and prices down 1%
  • civil aircraft and confidentialised items, up $326m (37%), with volumes up 35% and prices up 1%
  • capital goods n.e.s., up $295m (10%), with volumes up 10%.


Partly offsetting these rises were:

  • industrial transport equipment n.e.s., down $356m (13%), with volumes down 12%
  • telecommunications equipment, down $198m (5%), with volumes down 6%.
     

Intermediate and other merchandise goods

Imports of intermediate and other merchandise goods, in seasonally adjusted terms at current prices, rose $1,049m (3%) to $33,671m, with volumes up 2% and prices up 1%.

The main components contributing to the rise were:

  • fuels and lubricants, up $914m (10%), with volumes up 7% and prices up 3%
  • other parts for capital goods, up $180m (4%), with volumes up 3%
  • parts for transport equipment, up $114m (3%), with volumes up 2% and prices up 1%.
     

Partly offsetting these rises was processed industrial supplies n.e.s., down $180m (2%), with volumes down 2%.

Non-monetary gold

Imports of non-monetary gold, in original and seasonally adjusted terms at current prices, fell $1,287m (49%) to $1,327m, with volumes down 50% and prices up 1%.

Services

The trend estimate of net services at current prices was a deficit of $321m, a fall of $165m on the September quarter 2019 deficit of $486m.

In seasonally adjusted terms at current prices, net services was a deficit of $261m, a fall of $235m on the September quarter 2019 deficit of $496m.

Services, price and volume analysis: seasonally adjusted - December quarter 2019

  Change in:
 Current pricesCurrent pricesChain volume measures(a)Implicit price deflators(a)(b)
 $m%%%
Exports
127
0.5
-
0.5
Manufacturing services on physical inputs owned by others
-
-
-
-
Maintenance and repair services n.i.e.
7
116.7
116.5
0.1
Transport
30
1.5
1.4
0.1
Travel
290
1.7
1.1
0.6
Other services
-200
-2.8
-3.0
0.2
Imports
-108
-0.4
-1.8
1.4
Manufacturing services on physical inputs owned by others
-
-
-
-
Maintenance and repair services n.i.e.
-40
-13.1
-14.4
1.6
Transport
18
0.4
1.6
-1.2
Travel
187
1.4
-0.8
2.3
Other services
-273
-3.3
-4.9
1.7
- nil or rounded to zero (including null cells)
a. Reference year 2017-18.
b. Movements in indexes are based on data to four decimal places.
   

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Services credits

Services credits, in seasonally adjusted terms at current prices, rose $127m to $25,854m.

The main component contributing to the rise was travel, up $290m (2%), with volumes up 1% and prices up 1%.

Partly offsetting this rise was other services, down $200m (3%), with volumes down 3%.

In seasonally adjusted terms, tourism related services credits rose $298m (2%) to $17,694m.

Services debits

Services debits, in seasonally adjusted terms at current prices, fell $108m to $26,115m, with volumes down 2% and prices up 1%.

The main component contributing to the fall was other services, down $273m (3%), with volumes down 5% and prices up 2%.

Partly offsetting this rise was travel, up $187m (1%), with volumes down 1% and prices up 2%.

In seasonally adjusted terms, tourism related services debits rose $138m (1%) to $15,079m.

Primary income

The trend estimate of the net primary income deficit at current prices fell $946m to $12,542m in the December quarter 2019.

In seasonally adjusted terms at current prices, the net primary income deficit fell $626m to $12,498m in the December quarter 2019.

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Primary income credits

Primary income credits, in seasonally adjusted terms at current prices, rose $22m to $17,469m.

The main components contributing to the rise were:

  • investment income from portfolio investment assets, up $299m (3%)
  • compensation of employees, up $43m (7%),
     

Partly offsetting these rises was investment income from direct investment assets, down $250m (4%).

Primary income debits

Primary income debits, in seasonally adjusted terms at current prices, fell $604m (2%) to $29,967m.

The main component contributing to the fall was investment income from direct investment liabilities, down $877m (6%).

Partly offsetting this fall was investment income from portfolio investment liabilities, up $260m (2%).

Secondary income

The trend estimate of the net secondary income deficit at current prices rose $90m to $337m in the December quarter 2019.

In seasonally adjusted terms at current prices, the net secondary income deficit rose $153m to $440m in the December quarter 2019.

Capital account

In original terms, the capital account deficit was $179m, an increase of $10m on the September quarter 2019 deficit of $169m. Capital account credits remained steady at $2m and capital account debits increased $12m (7%) in the December quarter 2019.

Financial account

The balance on the financial account, in original terms, recorded a net outflow of $1.7b, which was driven by a net outflow of equity of $7.8b and a net inflow of debt of $6.1b.

The financial account deficit decreased $3.9b from $5.5b in the September quarter 2019, to $1.7b in the December quarter 2019.

Direct investment

Direct investment recorded a net outflow of $1.2b in the December quarter 2019, a turnaround of $14.9b on the net inflow of $13.7b in the September quarter 2019, where:

  • direct investment liabilities recorded an inflow of $9.2b, an increase of $0.6b on the inflow of $8.6b in the September quarter 2019
  • direct investment assets recorded an outflow of $10.4b, a turnaround of $15.5b on the inflow of $5.1b in the September quarter 2019.
     

Portfolio investment

Portfolio investment recorded a net inflow of $19.2b in the December quarter 2019, a turnaround of $25.9b on the net outflow of $6.6b in the September quarter 2019, where:

  • equity and investment fund shares recorded a net outflow of $11.8b in the December quarter 2019, a decrease of $2.6b on the net outflow of $14.4b in the September quarter 2019
  • debt securities recorded a net inflow of $31.1b in the December quarter 2019, an increase of $23.3b on the net inflow of $7.8b in the September quarter 2019.
     

Financial derivatives

Financial derivatives recorded a net outflow of $3.3b in the December quarter 2019, a turnaround of $5.4b on the net inflow of $2.1b in the September quarter 2019.

Other investment

Other investment recorded a net outflow of $7.5b in the December quarter 2019, a decrease of $10.8b on the net outflow of $18.3b in the September quarter 2019. This was mainly driven by net outflows of $12.6b in loans and net inflows of $7.3b in currency and deposits.

Reserve assets

Reserve assets recorded an outflow of $9.0b in the December quarter 2019, a turnaround of $12.5b on the inflow of $3.5b in the September quarter 2019.

International investment position (IIP)

Australia's net IIP liability position was $891.5b at 31 December 2019, a decrease of $83.4b on the revised 30 September 2019 position of $974.9b. Australia's net foreign debt liability position decreased $20.9b to $1,143.5b. Australia's net foreign equity asset position increased $62.6b to $252.1b at 31 December 2019.

International investment position, by net foreign equity and net foreign debt

   Changes in position reflecting 
  Position at beginning of periodTransactionsPrice changesExchange rate changesOther adjustmentsPosition at end of period
  $m$m$m$m$m$m
Net International Investment Position      
 Jun 2019
991 048
-3 426
4 910
6 292
-2 158
996 666
 Sep 2019
996 666
-5 533
-237
-4 908
-11 063
974 925
 Dec 2019
974 925
-1 654
-89 395
10 519
-2 914
891 482
Net Foreign Equity
 Jun 2019
-132 344
5 383
-4 554
-10 363
-4 300
-146 179
 Sep 2019
-146 179
-2 269
-7 326
-19 480
-14 222
-189 476
 Dec 2019
-189 476
-7 771
-75 277
25 595
-5 135
-252 064
Net Foreign Debt
 Jun 2019
1 123 392
-8 808
9 464
16 655
2 142
1 142 845
 Sep 2019
1 142 845
-3 264
7 090
14 572
3 159
1 164 402
 Dec 2019
1 164 402
6 117
-14 117
-15 076
2 221
1 143 546

Supplementary information

Conditions

According to the Organisation for Economic Cooperation and Development (OECD) (footnote 2) preliminary growth rates compared to last quarter in seasonally adjusted terms showed quarterly growth for China (1.5%), Indonesia (1.2%), South Korea (1.2%), the USA (0.5%), Spain (0.5%), Belgium (0.4%), Netherlands (0.4%), the EU 28 (0.1%), the UK (0.0%), Germany (0.0%) and Japan (-1.6%).

  • Foreign asset transactions recorded an inflow of $6.3b in the December quarter 2019 compared to an outflow of $10.0b in the September quarter 2019
  • Foreign liability transactions recorded an outflow of $7.9b in the December quarter 2019 compared to an inflow of $4.5b in the September quarter 2019.


The Australian share market, as measured by the MSCI global index (footnote 3), decreased 0.7% in the December quarter 2019, compared to an increase of 1.2% in the September quarter 2019. Increases were recorded in China (13.9%), the USA (8.6%), New Zealand (8.7%), Japan (8.1%), Germany (6.7%), Hong Kong (6.3%), France (5.3%), Switzerland (4.5%), Singapore (3.8%), Canada (2.2%) and the UK (1.4%). A market price change of -$69.3b was recorded for foreign equity assets and -$6.0b for foreign equity liabilities in the December quarter 2019.

According to Thomson Reuters (footnote 4), the composite corporate benchmark yields decreased in the USA from 3.01% to 2.94%, and increased in the UK from 1.83% to 1.99%, Germany from 0.50% to 0.63% and Japan from 0.30% to 0.41% over the December quarter 2019. The long-term 10 year government bond yields increased in the USA from 1.68% to 1.92%, Australia from 1.03% to 1.20%, the UK from 0.49% to 0.82%, Japan from -0.22% to -0.02% and Germany from -0.57% to -0.19% over the December quarter 2019. A market price change of $0.9b was recorded for portfolio investment debt securities assets and -$18.4b for portfolio investment debt securities liabilities in the December quarter 2019.

The Australian dollar appreciated against most major trading currencies in the December quarter 2019. The Australian dollar appreciated 4.70% against the Japanese yen, 4.70% against the Indian rupee, 3.81% against the US dollar, 3.07% against the Hong Kong dollar, 2.35% against the Canadian dollar, 1.64% against the Chinese renminbi, 1.35% against the European euro, 1.21% against the Singapore dollar and 0.21% against the South Korean won. The Trade Weighted Index (TWI)(footnote 5) rose 1.86% to 60.30. The Australian dollar depreciated 2.70% against the UK pound sterling and 3.42% against the New Zealand dollar in the December quarter 2019. These movements were reflected in exchange rate changes for foreign assets of $36.2b and foreign liabilities of -$25.6b in the December quarter 2019.

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Relationship between IPD, EPI and IPI (footnote 6)

In original terms, the IPD for total goods credits fell 5.7% and the chain Laspeyres price index for goods exports fell 5.7%. The Export Price Index (EPI)(footnote 7) fell 5.2% during the December quarter 2019.

In original terms, the IPD for total goods debits rose 0.7% and the chain Laspeyres price index for goods imports rose 0.8%. The Import Price Index (IPI) (footnote 7) rose 0.7% during the December quarter 2019.

Differences between the IPD and International Trade Price Indexes can arise due to a number of methodological factors including differences in pricing points, timing, coverage and weights.

Goods and services, price comparison - December quarter 2019

   Change in:
  Seasonally adjusted Original 
  Implicit price deflators(a)Implicit price deflators(a)International trade price indexes(b)Chain Laspeyres price indexes(a)
  %%%%
Exports    
 Goods
-5.8
-5.7
-5.2
-5.7
 Services
0.5
0.5
na
0.5
Imports    
 Goods
0.7
0.7
0.7
0.8
 Services
1.4
1.4
na
1.4
na not available
a. Reference year 2017-18 = 100.
b. Source: International Trade Price Indexes, Australia (cat. no. 6457.0).
   
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  1. Reference year 2017-18 = 100.
  2. Source: International Trade Price Indexes, Australia (cat. no. 6457.0).
     

Commodity price indexes

The RBA Commodity Price Index (average monthly index) for rural commodities rose 3.1% between the September quarter 2019 and the December quarter 2019 while the EPI for rural goods rose 3.0%.

The RBA Commodity Price Index for non-rural commodities fell 8.3% between the September quarter 2019 and the December quarter 2019 while the EPI for non-rural goods (excluding non-monetary gold) fell 7.0%.

Differences between the RBA Commodity Price Index and ABS price measures are largely a consequence of methodological differences used in the construction of the respective indexes, including coverage of included commodities and timing of source data.

Calendar year 2019 situation

Current account

In original terms, the balance on current account for 2019 was a surplus of $10.3b, a turnaround of $49.4b on the deficit of $39.1b recorded for 2018. The balance on goods and services was a surplus of $67.6b, a rise of $44.6b on the surplus of $23.0b recorded for 2018.

The 2019 goods surplus of $70.0b was a rise of $41.7b on the surplus of $28.3b in 2018.

The 2019 services deficit of $2.4b was a fall of $2.9b on the deficit of $5.3b in 2018.

The 2019 net primary income deficit fell $4.9b, with a rise in primary income credits of $5.4b (8%) and a rise in primary income debits of $0.5b.

The 2019 net secondary income deficit rose $0.2b, with a rise in secondary income credits of $0.3b (3%) and a rise in secondary income debits of $0.5b (4%).

Financial account

The balance on financial account recorded a net outflow of $8.1b, with a net inflow on equity of $5.8b and a net outflow on debt of $13.9b. This result was a turnaround of $55.1b on the net inflow of $47.1b recorded for the previous year as a result of:

  • a decrease of $38.3b on the net inflow on direct investment
  • an increase of $32.7b on the net outflow on portfolio investment
  • a turnaround of $30.6b from the net outflow to the net inflow on other investment
  • a turnaround of $18.7b from the net inflow to the net outflow on reserve assets
  • a decrease of $3.9b on the net outflow on financial derivatives.
     

International investment position

Australia's net international investment position as at 31 December 2019 was a net foreign liability of $891.5b. This was a decrease of $126.4b (12%) on the position a year ago as a result of:

  • net transactions of -$8.1b
  • price changes of -$112.1b
  • exchange rate changes of $15.1b
  • other changes of -$21.4b.
     

During 2019, Australia's net foreign equity asset increased $152.9b on the previous year, to a net asset position of $252.1b, with net transactions of $5.8b, price changes of -$127.3b, exchange rate changes of -$1.2b and other changes of -$30.3b.

Australia's net foreign debt liability increased $26.5b on the previous year, to a net liability position of $1,143.5b, with net transactions of -$13.9b, price changes of $15.2b, exchange rate changes of $16.3b and other changes of $8.9b.

At 31 December 2019, the ratio of Australia's net international investment position to GDP using the latest available GDP figure (for the year ended 30 September 2019 using seasonally adjusted current prices) was 45.2%. This compares with 53.6% one year ago.

Footnotes

  1. In this commentary movements in indexes are based on data to four decimal places.
  2. OECD Statistics Quarterly National Account, Organisation for Economic Cooperation and Development – Economic Department, viewed 25 February 2020.
  3. MSCI Global Market Indexes 2019, Morgan Stanley Capital International, viewed 13 January 2020.
  4. Thomson Reuters, viewed 09 January 2020.
  5. Exchange Rates – Daily 2014 to Current, Reserve Bank of Australia - Statistical Tables, viewed 10 January 2020.
  6. In this commentary movements in indexes are based on data to four decimal places.
  7. Source: International Trade Price Indexes, Australia (cat. no. 6457.0).

Revisions

The following goods component has been revised since the release of the December 2019 issue of International Trade in Goods and Services, Australia (cat. no. 5368.0).

  • capital goods n.e.s. component of goods debits, revised in the December quarter 2019.
     

Summary of revisions since the last issue of this publication

Table 28 summarises revisions, in original current price terms, since the last issue of this publication.

Incorporation of the latest survey and administrative data has resulted in revisions to the balance of payments series back to the September quarter 2018. In original current price terms, these revisions have:

  • increased the 2018-19 current account deficit by $125m
  • decreased the current account surplus for the September quarter 2019 by $1,927m.
     

The International Investment Position (IIP) has been revised back to the September quarter 2018. These revisions have decreased Australia's net IIP liability $1,064m to a net liability position of $974,925m at 30 September 2019. The financial account deficit has been revised down $2,201m to $5,533m at 30 September 2019.

Seasonally adjusted and trend series have been revised due to the incorporation of revised estimates and the incorporation of estimates for the latest quarter.

In seasonally adjusted terms, the revisions decreased the volume surplus on goods and services by $867m for the September quarter 2019.

Data in this issue aligns with the data in the December quarter 2019 issue of Australian National Accounts: National Income, Expenditure and Product (cat. no. 5206.0) to be released on 4 March 2020.

Value adjustments

Goods credits data presented in this publication are based on information provided by exporters to the Department of Home Affairs (Home Affairs). At the time of initial reporting to Home Affairs, the final prices at which transactions take place are not known for some commodities. Final quantity and/or unit price information is updated progressively in international merchandise trade data as exporters revise the information provided to Home Affairs.

For commodities such as iron ore and coal, newly negotiated contract prices are not fully reflected in data first reported to Home Affairs. When additional information on quantity and/or unit price for these commodities is available, the ABS may adjust the data to reflect actual transaction values.

Iron ore adjustments are applied on an international merchandise trade basis at the Australian Harmonized Export Commodity Classification (AHECC) level. Coal, coke and briquettes are adjusted on a balance of payments basis in original current price terms. When actual final transaction prices become available estimates are replaced with these data.

In most instances, transfer of ownership occurs when goods cross the customs frontier. In certain circumstances the ownership of large value capital expenditure items can occur prior to the items crossing the customs frontier. The ABS may adjust the relevant balance of payments series to record the timing when transfer of ownership was effected.

Exports on an international merchandise trade basis

Iron ore (in original terms)

  • adjustments have been applied to iron ore lump in the September quarter (+$70m) and the December quarter (+$425m) 2019. Adjustments have been applied to iron ore fines in the June quarter (+$5m), the September quarter (+$15m) and the December quarter (+$750m) 2019. When actual final transaction prices become available estimates are replaced with these data.
     

Goods credits on a balance of payments basis

Coal (in original terms)

  • adjustments have been applied to coal, coke and briquettes in the balance of payments series for the December quarter (-$535m) 2019. All previous adjustments have been removed.
     

Capital expenditure (in original terms)

  • the balance of payments goods debits component capital goods n.e.s. includes an estimate of expenditure on capital goods that have changed ownership but have not yet crossed the customs frontier.

Related releases

International investment position, Australia: supplementary statistics

The publication International Investment Position, Australia: Supplementary Statistics, 2019 (cat. no. 5352.0) will be released on the ABS website on 7 May 2020.

International trade, Australia: supplementary statistics calendar year

The publication International Trade: Supplementary Information, Calendar Year, 2019 (cat. no. 5368.0.55.004) will be released on the ABS website on 21 May 2020.

Data downloads

All time series spreadsheets

Table 1. Balance of payments, summary: original - quarter

Table 2. International investment position: by net foreign equity and net foreign debt - quarter

Table 3. Foreign assets and liabilities: by equity and debt - quarter

Table 4. Current account transactions: seasonally adjusted and trend estimates - quarter

Table 5. Goods and services: chain volume measures and indexes - quarter

Table 6. Goods credits

Table 7. Goods debits

Table 8. Services credits

Table 9. Services debits

Table 10. Income credits - quarter

Table 11. Income debits - quarter

Table 12. Capital account: original - quarter

Table 13. Financial account - quarter

Table 14. International investment: foreign assets - quarter

Table 15. International investment: foreign liabilities - quarter

Table 16. Foreign debt levels - quarter

Table 17. Gross external debt liabilities: levels - quarter

Table 18. Currency and residual maturity of foreign debt - quarter

Table 19. Exchange rates - quarter

Table 20. Foreign assets and liabilities by industry - quarter

Table 21. Goods and services credit by state on a balance of payments basis - quarter

Table 22. Goods and services debits by state on a balance of payments basis - quarter

Table 23. Selected international accounts ratios: seasonally adjusted - quarter

Table 24. Quarterly combined current price seasonal adjusted factors

Table 25. Exports by SITC division on a balance of payments basis - quarter

Table 26. Imports by broad economic category on a balance of payments basis - quarter

Table 27. International investment: directional principle - quarter

Table 28. Summary of revisions - quarter

Table 29. International investment position: historical summary - quarter

Table 30. Balance of payments, summary: original - financial year

Table 31. Selected services, chain volume measures and implicit price deflators: original - quarter