Australia’s current account surplus in seasonally adjusted terms decreased $6.3 billion to $10.0 billion in the September quarter 2020, driven mainly by a decreased goods and services surplus, according to latest figures from the Australian Bureau of Statistics (ABS).
Balance of Payments components
The balance on goods and services surplus in the September quarter 2020 was $13.6 billion, a fall of $8.7 billion on the June quarter 2020 surplus of $22.3 billion. Exports of goods and services fell $6.5 billion (6 per cent) and imports of goods and services rose $2.2 billion (3 per cent). The net primary income deficit narrowed by $2.3 billion to $3.3 billion in the September quarter 2020.
Branko Vitas, Program Manager of the International Statistics Branch said: “COVID-19 continues to influence activity across the Balance of Payments this quarter, with rising imports and falls in exports of both goods and services a key feature of the Current Account”.
“Increased economic activity both domestically and internationally has supported a bounce back on imports, with notable rises in non-industrial transport equipment, fuels and lubricant, and textiles clothing and footwear. Increased global competition and reduced demand drove a decrease in bulk commodity exports while international travel bans continue to have a notable effect on education-related exports with falling Travel services”.
On the financial side, there was an increase in activity with issuances of Australian government debt being taken up by foreign investors and Australian funds investing in resurgent markets overseas. Bond issuances by Australian depository institutions were low this quarter due to strong liquidity positions and access to government funding facilities.
Contribution to Gross Domestic Product
In seasonally adjusted chain volume terms, the balance on goods and services surplus decreased $8.9 billion, narrowing the surplus to $12.8 billion. The balance on goods and services is expected to detract 2.0 percentage points from September quarter 2020 Gross Domestic Product, assuming no significant revision to June quarter 2020 estimates of GDP.
International Investment Position (IIP)
Australia’s net IIP liability position was $942.8 billion at 30 September 2020, an increase of $3.6 billion on the revised 30 June 2020 position of $939.1 billion.
Australia’s net foreign debt liability position increased $47.5 billion to $1,157.8 billion. Australia’s net foreign equity asset position increased $43.8 billion to $215.0 billion.