Balance of Payments and International Investment Position, Australia

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Balance of payments statistics on current, capital and financial transactions and the international investment position statement

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Reference period
December 2022
Released
28/02/2023
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Key statistics

  • The current account balance, seasonally adjusted, rose $13,361m to a surplus of $14,114m.
  • The capital and financial account deficit was $10,067m, a turnaround of $23,057m on the September quarter 2022 surplus.
  • The net international investment liability position was $856,794m at 31 December 2022.

International accounts overview

Key figures ($m)
 Sep 22Dec 22
Balance on current account (a)75314,114
Balance on goods and services (a)31,45340,903
Net primary income (a)-30,401-26,407
Capital and financial account12,990-10,067
International investment position (b)859,901856,794

a. Seasonally adjusted estimates at current prices.
b. Levels at end of period

The current account balance (seasonally adjusted current price) for December quarter 2022 was a surplus of $14.1b. The current account balance increased $13.4b from the revised September quarter 2022 surplus of $0.8b.

The increase in the current account reflected a rise in the trade surplus and a decline in the net primary income deficit.

The balance on goods and services in seasonally adjusted chain volume terms is expected to contribute 1.1 percentage points to the December quarter 2022 GDP quarterly movement, assuming no significant revision to September quarter 2022 estimates of GDP.

The terms of trade increased 0.6% to 111.7, up from 111.1 in September quarter 2022.  

The net primary income deficit fell to $26.4b, following the record high deficit of $30.4b in September quarter 2022.

Australia's net international investment liability position was $856.8b at December quarter 2022, a decrease of $3.1b on the revised September quarter 2022 position of $859.9b.

 

Annual seasonal re-analysis

The seasonally adjusted and trend estimates of goods, services, primary income and secondary income will be revised in the March quarter 2023 issue of this publication as a result of the annual seasonal re-analysis. This re-analysis reviews the seasonal and trading day factors in more detail than is possible in the quarterly processing cycle and assesses the appropriateness of any prior corrections. The suspension of trend estimates and use of the forward factor method for series with significant and prolonged impacts from COVID-19 will also be reviewed as part of this process.

  1. Seasonally adjusted estimates at current prices.

Current Account

Balance on current account, current price, seasonally adjusted ($m)
 Sep 22Dec 22Sep 22 to Dec 22
Balance on current account75314,11413,361
Balance on goods and services31,45340,9039,450
Net goods39,26644,6265,360
Net Services-7,813-3,7234,090
Net primary income-30,401-26,4073,994
Net secondary income-299-382-83

Terms of trade

Australia's seasonally adjusted terms of trade on net goods and services for the December quarter 2022 rose 0.6% to 111.7, with an increase of 1.8% in the implicit price deflator (IPD) for goods and services credits and an increase of 1.3% in the IPD for goods and services debits.

  1. Seasonally adjusted, reference year 2020-21=100.

Relationship between IPD, EPI and IPI

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.

Price comparison (QoQ % change)
 Implicit price deflators (a) (b)Implicit price deflators (a) (b)Chain Laspeyres Indexes (a) (b)International Trade Price Indexes (c)
 Seasonally AdjustedOriginalOriginalOriginal
Goods exports2.41.5-1.2-0.9
Services exports1.51.41.0na
Goods imports1.61.51.81.8
Services imports-0.21.51.0na

na not available
a. Reference year 2020-21=100.
b. Movements in indexes are calculated from unrounded data.
c. Source: International Trade Price Indexes, Australia.

  1. Reference year 2020-21=100.
  2. Source: International Trade Price Indexes, Australia.

Balance on goods and services

In seasonally adjusted chain volume terms, the balance on goods and services was a surplus of $17,245m, an increase of $6,066m on the revised September quarter 2022 surplus of $11,179m.

The rise in the balance on goods and services surplus of $6.1 billion (seasonally adjusted chain volume measure) is expected to contribute 1.1 percentage points to the December quarter 2022 GDP quarterly movement. 

  1. Seasonally adjusted, reference year 2020-21=100.

Exports of goods (credits)

In seasonally adjusted terms at current prices, goods credits rose $2,832m (1.9%) to $155,116m, with volumes down 0.5% and prices up 2.4%.

 

Goods credits, price and volume change, seasonally adjusted - December quarter 2022
 Current prices ($m)Current prices (%)Chain volume measures (a)(b)(%)Implicit price deflators (a)(b)(%)
Exports of goods2,8321.9-0.52.4
 Rural goods860.4-3.54.1
 Non-rural goods4,3643.52.31.1
 Net exports of goods under merchanting-102-102.0-102.00.4
 Non-monetary gold(c)-1,517-20.5-23.74.3

a. Reference year 2020-21=100.
b. Movements are calculated from unrounded data.
c. This component is not seasonally adjusted.

Rural goods

Rural goods (a)
 Sep 22 ($m)Dec 22 ($m)Sep 22 to Dec 22 ($m)Sep 22 to Dec 22 (%)
Rural goods19,83819,924860.4
 Meat and meat preparations4,4013,865-536-12.2
 Cereal grains and cereal preparations5,8446,53168711.8
 Wool and sheepskins1,177709-468-39.8
 Other rural(b)8,4168,8194034.8

a. Seasonally adjusted estimates at current prices.
b. For all time periods, estimates for sugar, sugar preparations and honey are included in Other non-rural

Non-rural goods

Non-rural goods (a)
 Sep 22 ($m)Dec 22 ($m)Sep 22 to Dec 22 ($m)Sep 22 to Dec 22 (%)
Non-rural goods124,933129,2974,3643.5
 Metal ores and minerals(b)40,82343,6162,7936.8
 Coal, coke and briquettes(b)36,45635,977-479-1.3
 Other mineral fuels(b)28,89029,6857952.8
 Metals (excl. non-monetary gold)3,5464,13558916.6
 Machinery3,1303,179491.6
 Transport equipment1,1031,24714413.1
 Other manufactures6,3826,7263445.4
 Other non-rural (incl. sugar and beverages)(c)3,7273,8711443.9
 Goods procured in ports by carriers(d)875861-14-1.6

a. Seasonally adjusted estimates at current prices.
b. Separate seasonally adjusted factors for current price and chain volume measures are applied.
c. For all time periods, estimates for sugar, sugar preparations and honey are included in Other non-rural.
d. In using these seasonally adjusted series, care should be exercised because of the difficulties associated with reliably estimating the seasonal pattern. 

  1. Seasonally adjusted estimates at current prices.

Imports of goods (debits)

In seasonally adjusted terms at current prices, goods debits fell $2,529m (2.2%) to $110,489m, with volumes down 3.8% and prices up 1.6%. 

Goods debits, price and volume change, seasonally adjusted - December quarter 22
 Current prices ($m)Current prices (%)Chain volume measures (a)(b)(%)Implicit price deflators (a)(b)(%)
Total Goods Imports-2,529-2.2-3.81.6
 Consumption goods-237-0.7-3.02.4
 Capital goods-417-1.6-5.33.8
 Intermediate and other merchandise goods-1,474-2.9-2.4-0.5
 Non-monetary gold(c)-400-21.8-24.94.1

a. Reference year 2020-21=100.
b. Movements are calculated from unrounded data.
c. This component is not seasonally adjusted.

Consumption goods

Consumption goods (a)(b)
 Sep 22 ($m)Dec 22 ($m)Sep 22 to Dec 22 ($m)Sep 22 to Dec 22 (%)
Consumption goods-34,245-34,008-237-0.7
 Food and beverages, mainly for consumption-5,069-4,879-190-3.7
 Household electrical items-2,088-1,896-192-9.2
 Non-industrial transport equipment-7,826-8,62980310.3
 Textiles, clothing and footwear-6,082-5,835-247-4.1
 Toys, books and leisure goods-2,172-2,017-155-7.1
 Consumption goods n.e.s.-11,008-10,752-256-2.3

a. Seasonally adjusted estimates at current prices.
b. For sign conventions, see the Explanatory notes.

Capital goods

Capital goods (a)(b)
 Sep 22 ($m)Dec 22 ($m)Sep 22 to Dec 22 ($m)Sep 22 to Dec 22 (%)
Capital goods-25,763-25,346-417-1.6
 Machinery and industrial equipment-8,521-8,305-216-2.5
 ADP equipment-3,732-3,547-185-5.0
 Telecommunications equipment-4,219-3,938-281-6.7
 Civil aircraft and confidentialised items(c)(d)-1,450-1,528785.4
 Industrial transport equipment n.e.s.-4,288-4,239-49-1.1
 Capital goods n.e.s.(e)-3,555-3,7902356.6

a. Seasonally adjusted estimates at current prices.
b. For sign conventions, see the Explanatory notes.
c. From July 2008, commodities subject to a 'no commodity details' or 'no value details' restriction are included in Civil aircraft and confidentialised items. For earlier periods, commodities subject to a 'no commodity details' or 'no value details' restriction are included in Other merchandise goods.
d. This component is not seasonally adjusted.
e. In using these seasonally adjusted series, care should be exercised because of the difficulties associated with reliably estimating the seasonal pattern.

Intermediate and other merchandise goods

Intermediate and other merchandise goods (a)(b)
 Sep 22 ($m)Dec 22 ($m)Sep 22 to Dec 22 ($m)Sep 22 to Dec 22 (%)
Intermediate and other merchandise goods-51,172-49,698-1,474-2.9
 Food and beverages, mainly for industry-726-750243.3
 Primary industrial supplies n.e.s.(c)-591-620294.9
 Fuels and lubricants(d)(e)-18,951-17,375-1,576-8.3
 Parts for transport equipment-4,118-4,5274099.9
 Parts for ADP equipment-199-2262713.6
 Other parts for capital goods-6,146-6,025-121-2.0
 Organic and inorganic chemicals-1,920-1,770-150-7.8
 Paper and paperboard-692-707152.2
 Textile yarn and fabrics-483-453-30-6.2
 Iron and steel-1,293-1,252-41-3.2
 Plastics-1,511-1,385-126-8.3
 Processed industrial supplies n.e.s.-14,234-13,753-481-3.4
 Other merchandise goods(f)(g)-214-510296138.3
 Goods procured in ports by carriers(d)-94-345251267.0

a. Seasonally adjusted estimates at current prices.
b. For sign conventions, see the Explanatory notes.
c. In using these seasonally adjusted series, care should be exercised because of the difficulties associated with reliably estimating the seasonal pattern.
d. Prior to March quarter 2010 this component is not seasonally adjusted.
e. Separate seasonally adjusted factors for current price and chain volume measures are applied.
f. From July 2008, commodities subject to a 'no commodity details' or 'no value details' restriction are included in Civil aircraft and confidentialised items. For earlier periods, commodities subject to a 'no commodity details' or 'no value details' restriction are included in Other merchandise goods.
g. From July 1981, this component is not seasonally adjusted.

Services

Services credits, price and volume change, seasonally adjusted - December quarter 2022
 Current prices ($m)Current prices (%)Chain volume measures (a)(b)(%)Implicit price deflators (a)(b)(%)
Exports of services2,25311.49.81.5
 Manufacturing services on physical inputs owned by others----
 Maintenance and repair services n.i.e.11110.0107.91.0
 Transport(c)36524.820.63.5
 Travel(c)1,89620.318.91.2
 Other services-17-0.2-1.51.3

- nil or rounded to zero (including null cells)
a. Reference year 2020-21=100.
b. Movements are calculated from unrounded data.
c. This component has been seasonally adjusted using the forward factor method since March 2020 due to the impacts of COVID-19. 

Services debits, price and volume change, seasonally adjusted - December quarter 2022
 Current prices ($m)Current prices (%)Chain volume measures (a)(b)(%)Implicit price deflators (a)(b)(%)
Imports of services-1,837-6.7-6.5-0.2
 Manufacturing services on physical inputs owned by others----
 Maintenance and repair services n.i.e.2318.516.71.6
 Transport(c)-1,450-15.0-11.1-4.4
 Travel(c)-154-2.0-6.24.5
 Other services-255-2.6-4.52.1

- nil or rounded to zero (including null cells)
a. Reference year 2020-21=100.
b. Movements are calculated from unrounded data.
c. This component has been seasonally adjusted using the forward factor method since March 2020 due to the impacts of COVID-19. 

Income

Net primary income deficit remained elevated, narrowing to $26,407m in the December quarter 2022. 

  1.  Seasonally adjusted estimates at current prices.

Primary income credits

In seasonally adjusted terms at current prices, income to residents (credits) rose $2,470m (10.9%) to $25,165m. The main components contributing to this movement were:

  • Direct investment assets - investment income on equity and investment fund shares; up $1,536m (15.2%)
  • Portfolio investment assets - interest; up $589m (19.2%)
  • Other investment assets; up $325m (30.1%)

Primary income debits

In seasonally adjusted terms at current prices income to non-residents (debits) fell $1,524m (2.9%) to $51,572m. The main components contributing to this movement were:

  • Direct investment liabilities - income on equity and investment fund shares; down $2,559m (9.0%)
  • Portfolio investment liabilities - income on equity and investment fund shares; down $1,043m (10.3%)

Partly offset by:

  • Portfolio investment liabilities - interest; up $1,683m (17.4%)
  • Other investment income; up $386m (19.3%)

Secondary income

In seasonally adjusted terms at current prices, the net secondary income deficit rose $83m to $382m in the December quarter 2022. 

Capital and Financial Account

The capital and financial account recorded a deficit of $10.1b during the December 2022 quarter, mainly driven by the financial account deficit of $9.9b.

The financial account fell due to a $28.2b net outflow of equity and a $18.3b net inflow of debt.

Capital and financial account ($m)
 Mar 22Jun 22Sep 22Dec 22Sep 22 to
Dec 22
Capital account-186-211-239-19445
 Acquisitions/disposals of non-produced non-financial assets256-11-14-3
  Acquisitions/disposals of non-produced non-financial assets credits668---
  Acquisitions/disposals of non-produced non-financial assets debits-4-12-11-14-3
 Capital transfers-188-267-228-18048
  Capital transfers credits-----
  Capital transfers debits-188-267-228-18048
Financial account-5,646-19,89413,229-9,873-23,102
 Direct investment-59,296-6,2283,307-16,977-20,284
  Direct investment assets-118,300-12,217-28,076-15,00913,067
  Direct investment liabilities59,0055,98931,383-1,969-33,352
 Portfolio investment56,77639,3905,18120,84815,667
  Portfolio investment assets-32,96315,120-2,583-17,014-14,431
  Portfolio investment liabilities89,73924,2707,76437,86230,098
 Financial derivatives-2,734-1,8255,989-10,994-16,983
  Financial derivatives assets43,34075,658117,83096,068-21,762
  Financial derivatives liabilities-46,074-77,483-111,840-107,0624,778
 Other investment207-50,770474-1,794-2,268
  Other investment assets-16,796-32,784-2,1233,2325,355
  Other investment liabilities17,003-17,9862,597-5,026-7,623
 Reserve assets-599-462-1,721-956765
 Net errors and omissions3,887-220-4,385-4,36916

- nil or rounded to zero (including null cells)

International Investment Position

Australia's net IIP liability position was $856.8b at 31 December 2022, a decrease of $3.1b on the revised 30 September 2022 figure of $859.9b. Australia's net foreign equity asset position increased $6.7b to $306.1b at 31 December 2022. Australia's net foreign debt liability position increased $3.6b to $1,162.8b.

International investment position, by net foreign equity and net foreign debt ($m)
 Position at beginning of periodTransactionsPrice changesExchange rate changesOther adjustmentsPosition at end of period
Net International Investment Position
 Jun‑22825,377-19,89470,044-38,145446837,827
 Sep‑22837,82713,22933,258-22,448-1,965859,901
 Dec‑22859,901-9,873-9,60117,623-1,256856,794
Net Foreign Equity
 Jun‑22-309,476-1,09784,948-74,615-1,579-301,819
 Sep‑22-301,81910,33931,779-36,333-3,325-299,360
 Dec‑22-299,360-28,186-3,95129,195-3,748-306,051
Net Foreign Debt
 Jun‑221,134,853-18,797-14,90536,4702,0251,139,646
 Sep‑221,139,6462,8911,47913,8861,3611,159,262
 Dec‑221,159,26218,313-5,650-11,5722,4921,162,845

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Supplementary Information

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, final transaction prices are not known for some commodities. Final quantity and/or unit price information is updated progressively 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 final transaction prices become available adjusted 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 occurs prior to the items crossing the customs frontier. The ABS adjusts the relevant balance of payments series to record the timing when transfer of ownership takes place.

Exports on an international merchandise trade basis

Iron ore (in original terms)

  • Adjustments have been applied to iron ore lumps in the September quarter 2022 (-$40m) and December quarter 2022 (+$75m).
  • Adjustments have been applied to iron ore fines in the September quarter 2022 (-$45m) and December quarter (+$180m). 
  • When actual final transaction prices become available estimates are replaced with these data.

 

Goods 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 September quarter (-$130m) and the December quarter (+$1,035m) 2022. All previous adjustments have been removed. 

Other mineral fuels (in original terms) 

  • Adjustments have been applied to other mineral fuels in the balance of payments series for the December quarter (-$370m) 2022.

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.

 

    Revisions

    Revisions to Primary income debits

    • The September quarter 2022 current account balance was revised from a $2,278 million deficit to a $753 million surplus. In addition to regular revisions due to the incorporation of updated data (detailed below), there have also been revisions to primary income debits series following a review of seasonal treatments for portfolio investment on equity.

    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 2021. In original current price terms, these revisions have:

    • increased the current account surplus for September quarter 2022 by $26m, driven by an increase in net primary income of $175m offset by a decrease in net goods and services of $144m and secondary income of $5m.

    The International Investment Position (IIP) has been revised back to the September quarter 2021. These revisions have decreased Australia's net IIP liability $1,718m to a net liability position of $859,901m at 30 September 2022. The financial account deficit has been revised up $5,122m to $13,229m at 30 September 2022.

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

    Data in this issue aligns with the data in the December quarter 2022 issue of Australian National Accounts: National Income, Expenditure and Product to be released on 1 March 2023.

    Economic conditions

    CountryMSCI quarterly percentage change (a)(%)AUD exchange rate quarterly percentage change (b)(%)
    Australia8.81na
    United States of America6.924.20
    United Kingdom8.85-3.60
    Europe21.43-3.91
    China12.262.30
    Japan3.28-4.33
    Singapore3.45-2.20
    India3.945.73
    New Zealand11.96-5.74

    OECD quarterly growth rates for select countries can be found through the following link: https://stats.oecd.org/index.aspx?queryid=350.

    1. MSCI data based on local currency except for Europe which is based on $USD. MSCI data from https://www.msci.com/.
    2. Exchange rates data from RBA: https://www.rba.gov.au/statistics/historical-data.html#exchange-rates.

    COVID-19 in this publication

    Suspension of trend estimates

    Suspension of trend estimates

    The trend series attempts to measure underlying behaviour of international trade activity. In the short term, this measurement will be significantly affected by the current COVID-19 pandemic and subsequent changes to regular patterns in international trade that will occur during this time. If the trend estimates in this publication were to be calculated without fully accounting for this unusual event, they would provide a misleading view of underlying international trade activity.

    It may be some time before the underlying trend in international trade activity can be accurately estimated. The trend series has therefore been suspended from June quarter 2019 and will be reinstated when more certainty emerges in the underlying trend in international trade.

    Seasonal adjustment and COVID-19

    Seasonal adjustment and COVID-19

    International Accounts uses the concurrent seasonal adjustment method, meaning that seasonal factors are re-estimated each time new data becomes available. If not appropriately accounted for, unusual events, such as COVID-19, can distort estimates calculated using this method. From March quarter 2020, seasonal factors for series with significant and prolonged impacts from COVID-19 will be calculated using the forward factor method.

    The ABS has advised users that it had moved to using forward factors for seasonal analysis of a number of series, including Travel Services. Current ABS (and international practice) requires at least three years of data to assess whether a change in the seasonal pattern has occurred. Should COVID-19 result in a long-term change to the seasonal pattern then revisions to these series may occur in the future. The ABS will consult with users on any future methods changes to seasonal adjustment and potential revisions.

    For more information on interpreting seasonally adjusted estimates of International travel services please see the May 2020 feature article International Travel Services time series which outlines the matter in greater detail.

    Previous catalogue number

    This release previously used catalogue number 5302.0.

    Methodology

    Balance of Payments and International Investment Position, Australia methodology, December 2022

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