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Balance of Payments and International Investment Position, Australia

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

Reference period
March 2021
Released
1/06/2021

Key statistics

  • The current account surplus, seasonally adjusted, rose $2,273m to $18,283m.
  • The capital and financial account deficit rose $4,696m to $15,363m.
  • Australia’s net IIP liability position was $874.6b at 31 March 2021.

Main features

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Key figures (a)
 Dec Qtr 2020 ($m)Mar Qtr 2021 ($m)
Balance on current account (b)16,01018,283
Balance on goods and services (b)19,52324,761
Net primary income (b)-2,985-6,048
Capital and financial account-10,667-15,363
International investment position (c)949,995874,641

(a) Trend series is not published from June Quarter 2019
(b) Seasonally adjusted
(c) Levels at end of period

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(a) Seasonally adjusted estimates at current prices.

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COVID-19 in this publication

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

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 that have been notably impacted by COVID-19 will be calculated using data up to and including December quarter 2019, then projected from March quarter 2020 onwards. This approach, known as the forward factor method, ensures that the seasonal factors are not distorted by COVID-19 impacts.

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.

Changes in this issue

Review of seasonal adjustment factors

International Accounts normally uses the concurrent seasonal adjustment method, resulting in seasonal factors being re-estimated with each new data point. As communicated in March 2020, where a time series will be exposed (or anticipated to be exposed) to significant and prolonged impacts from COVID-19, fixed forward factors would be adopted. 
Further information can be found here:

https://www.abs.gov.au/articles/methods-changes-during-covid-19-period

In International Accounts seven series were moved to forward factors:
•    Transport – Passenger exports;
•    Transport – Other exports;
•    Travel exports;
•    Other services exports;
•    Transport – Passenger imports;
•    Travel imports; and 
•    Other services imports.
  
As part of International Accounts' Extraordinary Annual Seasonal Adjustment Review (EASR) process, all seasonally adjusted time series have been individually assessed to determine how each observation from the previous year should be treated for estimation of seasonal factors for seasonally adjusting the current end of the series.  This process ensures that any disruption to series caused by COVID-19 does not unduly affect estimates of the seasonal factors, and consequently seasonally adjusted revisions are relatively minor.

The outcome of the International Accounts' EASR is that the import and export series of Other services and the export series of Transport – Other will be returned to concurrent seasonal adjustment, while the series related to travel services, passenger transport services, and state services will continue to use the forward factor method.  New forward factors have been calculated and will be used from the March quarter 2021 publication.

Current Account

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Balance on current account in current prices, seasonally adjusted (a) - March quarter 2021
 Current prices ($m)Current prices change ($m)
Balance on current account18,2832,273
Balance on goods and services24,7615,238
Net goods22,0376,785
Net services2,724-1,547
Net primary income-6,048-3,063
Net secondary income-43097

(a) For sign conventions, see the Concepts section in the Explanatory notes in the Methodology.

Terms of trade

Australia's seasonally adjusted terms of trade on net goods and services for the March quarter 2021 rose 7.4% to 114.7, with an increase of 6.5% in the implicit price deflator (IPD) for goods and services credits and a decrease of 0.9% in the IPD for goods and services debits.

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(a) Seasonally adjusted, reference year 2018-19 = 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.

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Price comparison (QoQ % change)
 Implicit price deflators (a)Implicit price deflators (a)Chain Laspeyres Indexes (b)International Trade Price Indexes (b)
 Seasonally AdjustedOriginalOriginalOriginal
Goods exports7.49.410.811.2
Services exports0.50.40.4na
Goods imports-0.40.6-0.2
Services imports-3.8-3.8-2.5na

- Nil or rounded to zero (including null cells)
na not available
(a) Reference year 2018-19 = 100.
(b) Source: International Trade Price Indexes, Australia (cat. no. 6457.0).

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(a) Reference year 2018-19 = 100
(b) Source: International Trade Price Indexes, Australia (cat. no. 6457.0).

Balance on goods and services

In seasonally adjusted chain volume terms, the balance on goods and services was a surplus of $10,000m, a fall of $2,903m on the December quarter 2020 surplus of $12,903m.

The fall in the balance on goods and services surplus, in seasonally adjusted chain volume terms, is expected to detract 0.6 percentage points from the change in the March quarter 2021 chain volume measure of GDP, assuming no significant revision to the GDP chain volume estimate for the December quarter 2020.

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(a) Seasonally adjusted, reference year 2018-19.

Exports of goods (credits)

In seasonally adjusted terms at current prices, goods credits rose $9,051m (10%) to $103,337m, with volumes up 2% and prices up 7%.

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Goods credits, price and volume change, seasonally adjusted - March quarter 2021
  Current prices ($m)Current prices (%)Chain volume measures (a)(%)Implicit price deflators (a)(b)(%)
Exports of goods9,0519.62.07.4
 Rural goods1,41812.813.8-0.8
 Non-rural goods7,70810.2-0.310.6
 Net exports of goods under merchanting-20-8.6-20.715.1
 Non-monetary gold-55-0.79.9-9.7

(a) Reference year 2018-19 = 100
(b) Movements in indexes are based on data to four decimal places

Rural goods

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Rural goods, current price, seasonally adjusted
  Dec-20 ($m)Mar-21 ($m)Dec-20 to Mar-21 ($m)Dec-20 to Mar-21 (%)
Rural goods11,07212,4901,41813
 Meat and meat preparations3,3723,278-94-3
 Cereal grains and cereal preparations2,3973,06066328
 Wool and sheepskins586633478
 Other rural(a)4,7175,52080317

(a) For all time periods, estimates for sugar, sugar preparations and honey are included in Other non-rural.

Non-rural goods

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Non-rural goods, current price, seasonally adjusted
  Dec-20 ($m)Mar-21 ($m)Dec-20 to Mar-21 ($m)Dec-20 to Mar-21 (%)
Non-rural goods75,32283,0307,70810
 Metal ores and minerals(a)41,78648,2326,44615
 Coal, coke and briquettes(a)9,2099,4522433
 Other mineral fuels(a)(b)9,20010,17097011
 Metals (excl. non-monetary gold)2,7813,07729611
 Machinery2,6672,623-44-2
 Transport equipment987913-74-7
 Other manufactures5,3145,271-43-1
 Other non-rural (incl. sugar and beverages)(c)3,0172,800-217-7
 Goods procured in ports by carriers(b)36149113036

(a) From September quarter 2019 onwards, separate seasonally adjusted factors for current price and chain volume measures are applied.
(b) In using these seasonally adjusted series, care should be exercised because of the difficulties associated with reliably estimating the seasonal pattern.
(c) For all time periods, estimates for sugar, sugar preparations and honey are included in Other non-rural.

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(a) Seasonally adjusted

(b) Between September quarter 2005 and September quarter 2019, seasonal factors were derived based on the corresponding chained volume measure.

(c) From September quarter 2019 onwards, separate seasonally adjusted factors for current price and chain volume measures are applied.

Imports of goods (debits)

In seasonally adjusted terms at current prices, goods debits rose $2,265m (3%) to $81,300m, with volumes up 3%.

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Goods debits, price and volume change, seasonally adjusted - March quarter 2021
  Current prices ($m)Current prices (%)Chain volume measures (a) (%)Implicit price deflators (a)(b)(%)
Total Goods Imports2,2652.93.3-0.4
 Consumption goods2260.83.1-2.2
 Capital goods-580-2.80.1-3.0
 Intermediate and other merchandise goods2,3228.34.73.4
 Non-monetary gold29718.831.4-9.6

(a) Reference year 2018-19 = 100
(b) Movements in indexes are based on data to four decimal places

Consumption goods

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Consumption goods(a), seasonally adjusted
 Dec 20 ($m)Mar 21 ($m)Dec 20 to Mar 21 ($m)Dec 20 to Mar 21 (%)
Consumption goods-29 151-29 3772261
 Food and beverages, mainly for consumption-4 377-4 410331
 Household electrical items-1 794-2 12433018
 Non-industrial transport equipment-6 443-6 5741312
 Textiles, clothing and footwear-5 305-5 165- 140-3
 Toys, books and leisure goods-2 033-2 045121
 Consumption goods n.e.s.-9 199-9 058- 141-2

- Nil or rounded to zero (including null cells) 
(a) For sign conventions, see the Explanatory notes.

Capital goods

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Capital goods, current price, seasonally adjusted
 Dec-20 ($m)Mar-21 ($m)Dec-20 to Mar-21 ($m)Dec-20 to Mar-21 (%) 
Capital goods-20,377-19,797-580-3 
 Machinery and industrial equipment-6,648-6,8151673 
 ADP equipment-2,865-2,853-12- 
 Telecommunications equipment-3,545-3,603582 
 Civil aircraft and confidentialised items(b)(c)-497-67317635 
 Industrial transport equipment n.e.s.-3,624-3,200-424-12 
 Capital goods n.e.s.(d)-3,199-2,653-546-17 

- Nil or rounded to zero
(a) 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.
(b) This component is not seasonally adjusted.
(c) 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

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Intermediate and other merchandise goods(a), current price, seasonally adjusted
 Dec-20 ($m)Mar-21 ($m)Dec-20 to Mar-21 ($m)Dec-20 to Mar-21 (%) 
Intermediate and other merchandise goods-27,926-30,2482,3228 
 Food and beverages, mainly for industry-523-541183 
 Primary industrial supplies n.e.s.(b)-462-387-75-16 
 Fuels and lubricants(c)-5,065-6,7151,65033 
 Parts for transport equipment-3,411-3,5471364 
 Parts for ADP equipment-199-2181910 
 Other parts for capital goods-4,794-4,790-4- 
 Organic and inorganic chemicals-843-908658 
 Paper and paperboard-567-562-5-1 
 Textile yarn and fabrics-436-428-8-2 
 Iron and steel-755-75941 
 Plastics-1,110-1,196868 
 Processed industrial supplies n.e.s.-9,684-10,0743904 
 Other merchandise goods(d)(e)-65-1114671 
 Goods procured in ports by carriers(c)-13-12-1-8 

- Nil or rounded to zero (including null cells)
(a) For sign conventions, see the Explanatory Notes.
(b) In using these seasonally adjusted series, care should be exercised because of the difficulties associated with reliably estimating the seasonal pattern.
(c) Prior to September quarter 2019 this component is not seasonally adjusted
(d) 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.
(e) From July 1981, this component is not seasonally adjusted

Services

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Services exports, price and volume change, seasonally adjusted - March quarter 2021
  Current prices ($m)Current prices (%)Chain volume measures (a)(%)Implicit price deflators (a)(b)(%)
Exports of services-1,246-8-8-
 Manufacturing services on physical inputs owned by others5500--
 Maintenance and repair services n.i.e.8114114-
 Transport1622-
 Travel-1,321-17-171
 Other services461--

- Nil or rounded to zero (including null cells)
(a) Reference year 2018-19 = 100
(b) Movements in indexes are based on data to four decimal places

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Services imports, price and volume change, seasonally adjusted - March quarter 2021
  Current prices ($m)Current prices (%)Chain volume measures (a) (%)Implicit price deflators (a)(b)(%)
Imports of services30037-4
 Manufacturing services on physical inputs owned by others----
 Maintenance and repair services n.i.e.-7-5-2-4
 Transport201611-5
 Travel-9-6-2-3
 Other services11515-4

- Nil or rounded to zero (including null cells)
(a) Reference year 2018-19 = 100
(b) Movements in indexes are based on data to four decimal places

Income

Primary income deficit widened by $3,063m to $6,048m in the March quarter 2021.

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Primary income credits

In seasonally adjusted terms at current prices, income to residents (credits) rose $1,271m (8.2%) to $16,695m. The main component contributing to this rise was:

  • direct investment assets, income on equity and investment fund shares, up $1,249m.

Primary income debits

In seasonally adjusted terms at current prices income to non-residents (debits) rose $4,334m (23.5%) to $22,743m. The main components contributing to this rise were:

  • portfolio investment liabilities, income on equity and investment fund shares, up $3,114m;
  • direct investment liabilities, income on equity and investment fund shares, up $1,185m.

Secondary income

In seasonally adjusted terms at current prices, the net secondary income deficit fell $97m to $430m in the March quarter 2021.

Capital and Financial Account

The capital and financial account recorded a deficit of $15.4b, mainly driven by the financial account deficit of $15.2. 

The financial account deficit was due to a net outflow of equity of $21.4b and a net inflow of debt of $6.2b.

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Capital and financial account
 Jun-20Sep-20Dec-20Mar-21Qtr on Qtr
 ($m)($m)($m)($m)($m)
Capital account-218-165-156-191-35
Acquisitions/disposals of non-produced non-financial assets0024-3-27
Acquisitions/disposals of non-produced non-financial assets credits00290-29
Acquisitions/disposals of non-produced non-financial assets debits00-5-32
Capital transfers-218-165-180-188-8
Capital transfers credits00000
Capital transfers debits-218-165-180-188-8
Financial account-21,375-6,070-10,511-15,172-4,661
Direct investment6,455-5,1593,6758,2934,618
Direct investment assets-1,096-10,120-1,8083,9345,742
Direct investment liabilities7,5514,9615,4834,360-1,123
Portfolio investment-9,27013,648-10,904-32,612-21,708
Portfolio investment assets14,731-41,309-70,326-9,75660,570
Portfolio investment liabilities-24,00154,95759,422-22,857-82,279
Financial derivatives-765-7,335-10,76766511,432
Financial derivatives assets101,16850,01726,72764,80138,074
Financial derivatives liabilities-101,933-57,353-37,494-64,136-26,642
Other investment-40,858-6,9826,70313,9467,243
Other investment assets15,80815,47625,035-2,140-27,175
Other investment liabilities-56,666-22,458-18,33216,08634,418
Reserve assets23,063-242781-5,465-6246
Net errors and omissions2,279-1,820-2,978-2,244734

International Investment Position

Australia's net IIP liability position was $874.6b at 31 March 2021, a decrease of $75.4b on the revised 31 December 2020 position of $950.0b. Australia's net foreign debt liability position decreased $23.2b to $1,138.9b. Australia's net foreign equity asset position increased $52.1b to $264.2b at 31 March 2021.

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International investment position, by net foreign equity and net foreign debt
  Position at beginning of periodTransactionsPrice changesExchange rate changesOther adjustmentsPosition at end of period
  ($m)($m)($m)($m)($m)($m)
Net International Investment PositionSep-20935,947-6,070-25,19544,56849949,299
Net International Investment PositionDec-20949,299-10,511-35,20146,552-144949,995
Net International Investment PositionMar-21949,995-15,172-60,305275-152874,641
        
Net Foreign EquitySep-20-173,376-41,705-33,11632,6751,674-213,849
Net Foreign EquityDec-20-213,849-34,333-33,75771,083-1,236-212,091
Net Foreign EquityMar-21-212,091-21,396-27,439-3,894604-264,216
        
Net Foreign DebtSep-201,109,32335,6367,92111,893-1,6251,163,148
Net Foreign DebtDec-201,163,14823,821-1,444-24,5311,0921,162,086
Net Foreign DebtMar-211,162,0866,224-32,8654,169-7561,138,858

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, 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 affected.

Exports on an international merchandise trade basis

Iron ore (in original terms)

  • Adjustments have been applied to iron ore lump in the September quarter 2020 (+$10m) and December quarter 2020 (+$20m).
  • Adjustments have been applied to iron ore fines in the September quarter 2020 (-$30m), December quarter 2020(+$165m) and March quarter 2021 (+$330m).
  • 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 March quarter (-$295m). 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.

Revisions

The following goods component has been revised since the release of the March 2021 issue of International Trade in Goods and Services, Australia.

  • fuel and lubricants component of goods debits, revised in the September quarter 2020.

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 2019. In original current price terms, these revisions have:

  • increased the current account surplus for September quarter 2019 by $6m;
  • decreased the current account surplus for December quarter 2019 by $179m;
  • decreased the current account surplus for March quarter 2020 by $168m;
  • increased the current account surplus for June quarter 2020 by $190m;
  • decreased the current account surplus for September quarter 2020 by $173m;
  • increased the current account surplus for December quarter 2020 by $895m.

 

The International Investment Position (IIP) has been revised back to the September quarter 2019. These revisions have increased Australia's net IIP liability $2,777m to a net liability position of $949,995m at 31 December 2020. The financial account deficit has been revised up $691m to $10,511m at 31 December 2020.

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 increased the volume surplus on goods and services by $1,066m for the December quarter 2020.

Data in this issue aligns with the data in the March quarter 2021 issue of Australian National Accounts: National Income, Expenditure and Product (cat. no. 5206.0) to be released on 2 June 2021.

Economic conditions

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CountryMSCI quarterly percentage change (a)(%)AUD exchange rate quarterly percentage change (b)(%)
Australia3.52na
United States of America5.10-1.30
United Kingdom4.05-2.10
Europe3.083.57
China-0.17-0.80
Japan7.896.08
Singapore10.600.55
India5.01-0.71
New Zealand-8.652.14

OECD quarterly growth rates for select countries can be found through the following link: https://stats.oecd.org/index.aspx?queryid=350
(a) MSCI data based on local currency except for Europe which is based on $USD. MSCI data from https://www.msci.com/ 
(b) Exchange rates data from RBA: https://www.rba.gov.au/statistics/historical-data.html#exchange-rates

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