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Due to a technical problem the time series spreadsheet for table 24 has been reissued.


MARCH KEY FIGURES

		Dec Qtr 2005	Mar Qtr 2006	Dec Qtr 2005 to Mar Qtr 2006
		$m	$m	% change
TREND ESTIMATES
Balance on current account		-13 903	-14 223	-2
Balance on goods and services		-4 252	-4 404	-4
Net income		-9 536	-9 708	-2
SEASONALLY ADJUSTED
Balance on current account		-14 330	-13 999	2
Balance on goods and services		-4 174	-4 676	-12
Net income		-10 037	-9 227	8
ORIGINAL
Balance on current account		-13 963	-13 305	5
Balance on capital and financial account		13 289	13 701	3
Levels at end of period
Net international investment position (IIP)		558 555	571 042	2
	Net equity	86 748	77 563	-11
	Net debt	471 807	493 480	5

Current Account, Main aggregates - Trend estimates at current prices

International Investment

MARCH KEY POINTS


BALANCE OF PAYMENTS

• The current account deficit, seasonally adjusted, fell $331m (2%) to $13,999m. The deficit on the balance of goods and services rose $502m (12%) to $4,676m. The income deficit fell $810m (8%) to $9,227m.
• In seasonally adjusted chain volume terms there was an increase of $28m in the deficit on goods and services. This could be expected to marginally detract from growth in the March quarter 2006 volume measures of GDP.

• Australia's net IIP rose $12b to a net liability position of $571b. Net foreign debt was $493b, an increase of $22b, due mostly to net debt inflows of $18b and exchange rate changes of $6b, consistent with the depreciation of the Australian dollar. Net foreign equity liabilities fell by $9b to $78b.

Incorporation of the latest survey and administrative data has resulted in revisions to the current account back to September quarter 2004, increasing the 2004-05 current account deficit by $27m and increasing the December quarter 2005 current account deficit by $115m. The financial account and international investment position have been revised back to September quarter 2004 decreasing Australia's net IIP liability as at 30 December 2005 by $1,616m.

CHANGES IN THIS ISSUE

There are no changes in this issue.

INQUIRIES

For further information contact Bernard Williams on Canberra (02) 6252 5540 for balance of payments estimates, and Joe Whelan on Canberra (02) 6252 5541 for international investment estimates.

TABLES ON AUSSTATS


TABLES AVAILABLE ON AUSSTATS

Data available free on the ABS web site <www.abs.gov.au> include:

• longer time series of all tables contained in this publication
• additional tables as listed below:

52 International investment position by net foreign equity and net foreign debt - Financial year

53 International investment position by foreign assets by equity and debt - Financial year

54 International investment position by foreign liabilities by equity and debt - Financial year

56 Goods and services: terms of trade, original - Financial year

57 Goods credits: original - Financial year

58 Goods debits: original - Financial year

63 Goods credits: implicit price deflators (Index numbers) - Financial year

64 Goods debits: implicit price deflators (Index numbers) - Financial year

65 Services credits: original - Financial year

66 Services debits: original - Financial year

68 Services credits: chain volume measures and implicit price deflators (Index numbers) - Financial year

69 Services debits: chain volume measures and implicit price deflators (Index numbers) - Financial year

70 Income credits: original - Financial year

71 Income debits: original - Financial year

73 Current transfers: original - Financial year

74 Capital account - Financial year

75 Financial Account - Financial year

76 International investment: Australian investment abroad - Financial year

77 International investment: foreign investment in Australia - Financial year

78 International investment: levels of Australian investment abroad - Financial year

79 International investment: levels of foreign investment in Australia - Financial year

80 International investment: foreign debt levels at the end of period - Financial year

81 International investment: gross external debt liabilities - Financial year

83 Balance of payments: exchange rates - Financial year

84 International investment: foreign assets and liabilities: by Industry - Financial year

85 Balance of payments: ratios of current account measures to GDP - Financial year

89 International investment position: historical summary - Financial year

95 Quarterly combined current price seasonal adjustment factors

101 Merchandise exports by SITC division on a Balance of payments basis, chain volume measures

102 Merchandise exports by SITC division on a Balance of payments basis, implicit price deflators

103 Merchandise exports by SITC division and section on a Recorded trade basis, chain volume measures

104 Merchandise exports by SITC division and section on a Recorded trade basis, implicit price deflators

105 Merchandise imports by End-Use categories on a Balance of payments basis, chain volume measures

106 Merchandise imports by End-Use categories on a Balance of payments basis, implicit price deflators

107 Merchandise imports by SITC division and section on a Recorded trade basis, chain volume measures

108 Merchandise imports by SITC division and section on a Recorded trade basis, implicit price deflators

109 Services credits and debits, confidentialised version, chain volume measures

110 Services credits and debits, confidentialised version, implicit price deflators

111 Balance of payments: current account transactions, seasonally adjusted and trend estimates (percentage change) - Quarter

112 Balance of payments: goods and services, implicit price deflators, original (index) - Quarter

113 Balance of payments: original and seasonally adjusted chain volume measures and indexes (percentage change) - Quarter

114 Balance of payments: goods credits, chain volume measures, original - Quarter

115 Balance of payments: goods debits, chain volume measures, original - Quarter

116 Balance of payments: services credits and debits, current prices, original and seasonally adjusted - Quarter

117 International investment: foreign assets, by direction and type of investment - Quarter

118 International investment: foreign liabilities, by direction and type of investment - Quarter

119 International investment: foreign debt transactions - Quarter

120 International investment: interest income on foreign debt - Quarter

214 Balance of payments: goods credits, chain volume measures, original - Financial year

215 Balance of payments: goods debits, chain volume measures, original - Financial year

216 Balance of payments: services credits and debits, current prices, original and seasonally adjusted - Financial year

217 International investment: foreign assets, by direction and type of investment - Financial year

218 International investment: foreign liabilities, by direction and type of investment - Financial year

219 International investment: foreign debt transactions - Financial year

220 International investment: interest income on foreign debt - Financial year

ANALYSIS AND COMMENTS


BALANCE OF PAYMENTS


CURRENT ACCOUNT

The trend estimate of the balance on current account for the March quarter 2006 was a deficit of $14,223m, an increase of $320m (2%) on the deficit recorded for the December quarter 2005. The main contributors to the increase in the deficit were goods debits which rose $1,301m (3%) and income debits which rose $384m (3%) partly offset by goods credits which rose $1,016m (3%) and income credits which rose $212m (4%).

In seasonally adjusted terms, the current account deficit fell $331m (2%) to $13,999m between the December quarter 2005 and March quarter 2006 where:

• the net income deficit fell $810m (8%) to $9,227m
• the net services deficit turned around by $380m to a surplus of $90m
• the net goods deficit rose $882m (23%) to $4,766m.

In seasonally adjusted terms, the balance on goods and services was a deficit of $4,676m, an increase of $502m (12%) on the December quarter 2005 deficit where:

• the goods deficit rose $882m (23%) to $4,766m
• the services deficit turned around by $380m to a surplus of $90m.

The increase in goods debits was composed of:

• intermediate and other merchandise goods, up $895m (5%)
• other goods, up $565m (42%)
• consumption goods, up $52m
• capital goods, down $73m (1%).

• other goods, up $275m (12%)
• rural goods, up $248m (4%)
• non-rural goods, up $34m.

In seasonally adjusted volume terms, the deficit on goods and services was $12,692m, an increase of $28m on the $12,664m deficit recorded in the December quarter 2005. The net deficit on goods rose $479m (4%) to $12,533m. Goods debits rose $358m (1%) while goods credits fell $121m. The net services balance was a deficit of $158m, a decrease of $453m (74%) on the December quarter 2005 deficit of $611m.

The increase of $28m in the deficit on goods and services in volume terms could be expected to marginally detract from growth in the March quarter 2006 volume measures of GDP, assuming no significant revision to the GDP chain volume estimate for the December quarter 2005.

Goods and Services(a)

In seasonally adjusted current price terms, goods credits rose $557m (1%) to $38,420m.

Rural goods (seasonally adjusted, current prices) rose $248m (4%) to $6,430m, with volumes up 6% and prices down 2%. The largest increases were in:

• cereal grains and cereal preparations, up $160m (14%), with volumes up 19% and prices down 5%
• wool and sheepskins, up $52m (9%), with volumes up 6% and prices up 2%
• meat and meat preparations, up $36m (2%), with volumes up 4% and prices down 2%.

• metals (excluding non-monetary gold), up $240m (9%), with volumes down 5% and prices up 15%
• coal, coke and briquettes, up $149m (2%), with volumes up 5% and prices down 2%
• machinery, up $67m (3%), with volumes up 2% and prices up 1%
• other manufactures, up $31m (1%), with volumes up 4% and prices down 3%.

• metal ores and minerals, down $218m (3%), with volumes down 8% and prices up 5%
• transport equipment, down $172m (13%), with volumes down 13% and prices up 1%
• other non-rural (including sugar and beverages), down $45m (1%), with volumes down 6% and prices up 4%.

General Merchandise Credits(a)

In seasonally adjusted current price terms, goods debits rose $1,439m (3%) to $43,186m.

Consumption goods imports (seasonally adjusted, current prices) rose $52m to $12,470m, on increased prices. The largest increases were in:

• household electrical items, up $100m (10%), with volumes up 12% and prices down 2%
• food and beverages, mainly for consumption, up $47m (3%), with volumes up 1% and prices up 2%
• toys, books and leisure goods, up $45m (5%), with volumes up 3% and prices up 1%.

Capital goods imports (seasonally adjusted, current prices) fell $73m (1%) to $10,452m, with volumes up 1% and prices down 1%. The largest decreases were in:

• civil aircraft, down $436m, largely on reduced volumes
• capital goods n.e.s., down $280m (17%), with volumes down 19% and prices up 2%.

• machinery and industrial equipment, up $312m (9%), with volumes up 6% and prices up 3%
• telecommunications equipment, up $236m (18%), with volumes up 26% and prices down 6%
• ADP equipment, up $119m (8%), with volumes up 11% and prices down 2%.

• fuels and lubricants, up $739m (15%), with volumes up 8% and prices up 6%
• processed industrial supplies n.e.s., up $101m (3%), with volumes down 3% and prices up 6%
• other parts for capital goods, up $67m (3%), largely on increased prices
• primary industrial supplies n.e.s., up $63m (25%), with volumes up 22% and prices up 3%
• parts for transport equipment, up $57m (3%), largely on increased prices
• parts for ADP equipment, up $48m (11%), with volumes up 10% and prices up 1%.

• other merchandise goods, down $126m (36%), largely on decreased volumes
• iron and steel, down $56m (7%), largely on decreased volumes.

General Merchandise Debits(a)

In seasonally adjusted terms, net services recorded a surplus of $90m, a turnaround of $380m from the deficit of $290m in the December quarter 2005.

Services credits, in seasonally adjusted terms at current prices, rose $454m (5%) to $9,813m, with volumes up 4% and prices up 1%. Increases were in:

• travel services, up $305m (6%), largely on increased volumes
• passenger and other transportation services, up $95m (5%), with volumes up 2% and prices up 3%
• other services, up $60m (2%), with both volumes and prices up 1%.

• freight transportation services, up $86m (4%), with volumes down 1% and prices up 5%
• other services, up $33m (1%), largely on increased prices.

• passenger and other transportation services, down $26m (2%), with volumes down 4% and prices up 2%
• travel services, down $19m (1%), with volumes down 2% and prices up 1%.

Implicit Price Deflator

In seasonally adjusted terms, the implicit price deflator (IPD) for total goods and services credits rose 1.6%.

In original terms, it rose by 1.7%. The chain Laspeyres price index for goods and services credits rose 2.5%, indicating that the compositional effects had a downward influence on the movement in the IPD. The IPD for goods credits rose 2.3% and the IPD for services credits rose 1.2%.

The total goods and services debits IPD rose 2.4% in seasonally adjusted terms. In original terms, it rose by 3.1%. The chain Laspeyres price index for debits rose 2.3%.

IMPLICIT PRICE DEFLATOR(a)

During the March quarter 2006, the goods imports IPD (in original terms) rose 3.3% and the chain Laspeyres price index for goods imports rose 2.3%. The import price index (IPI) rose 1.8%.

Terms of trade

Australia's seasonally adjusted terms of trade fell 0.8% to 121.7, with an increase of 1.6% in the IPD for goods and services credits and a 2.4% increase in the goods and services debits IPD. The trend estimate of the terms of trade increased 1.2% to 122.9.

Income

The trend estimate of the net income deficit rose $172m (2%) to $9,708m.

In seasonally adjusted terms, the net income deficit fell $810m (8%) to $9,227m. Income credits rose $701m (13%) to $6,175m and income debits fell $109m (1%) to $15,402m.

In original terms, the net income deficit fell $317m (3%) to $9,214m. Income credits rose $550m (10%) to $6,149m and income debits rose $233m (2%) to $15,363m.

Net Income

CAPITAL AND FINANCIAL ACCOUNT

Capital Account

In original terms, the capital account surplus was $288m, up $53m on the December quarter 2005 surplus. Capital transfer credits rose $70m (11%) to $696m and capital transfer debits rose $18m (5%) to $406m.

Financial Account

In original terms, the balance on financial account recorded a net inflow of $13.4b, with a $18.1b inflow of debt and a $4.7b outflow of equity.

Direct investment in Australia recorded an inflow of $3.0b in March quarter 2006, a decrease of $0.9b on the December quarter 2005 inflow of $3.9b. Australia's direct investment abroad recorded an outflow of $5.8b, an increase of $3.0b on the previous quarter's outflow of $2.7b. In net terms, direct investment recorded an outflow of $2.8b, a turnaround of $3.9b on last quarter's inflow of $1.1b.

Portfolio investment recorded a net inflow of $20.0b, an increase of $2.4b on the net inflow of $17.6b in December quarter 2005. This was driven mainly by continuing increases in foreign debt.

Other investment recorded a net outflow of $1.8b, a turnaround of $7.2b on the net inflow of $5.4b in the previous quarter.

Reserve assets recorded a net outflow of $1.5b, a decrease of $8.4b on the previous quarter's net outflow of $9.9b.

INTERNATIONAL INVESTMENT POSITION


INTERNATIONAL INVESTMENT

Australia's net international investment position as at 31 March 2006 was a net foreign liability of $571.0b, up $12.5b (2.2%) on 31 December 2005. The increase consisted of:

• net transactions of $13.4b
• price changes of -$3.4b
• exchange rate changes of $2.1b
• other adjustments of $0.3b.

During the March quarter 2006 net equity liabilities fell $9.2b (10.6%) to close at $77.6b. The major contributors to this decrease were net transactions of -$4.7b, exchange rate changes of -$3.9b and market price changes of -$0.9b, partially offset by other adjustments of $0.3b.