5302.0 - Balance of Payments and International Investment Position, Australia, March 2012 
Quality Declaration
Quality Declaration ARCHIVED ISSUE Released at 11:30 AM (CANBERRA TIME) 05/06/2012
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ANALYSIS AND COMMENTS
VOLUMES AND PRICES Goods and Services In seasonally adjusted chain volume terms, the balance on goods and services was a deficit of $14,635m, a rise of $1,816m (14%) on the December quarter 2011 deficit of $12,819m. The net deficit on goods rose $647m (7%) on the December quarter 2011 deficit of $8,700m. Goods credits fell $769m (1%) and goods debits fell $122m. The net deficit on services rose $1,167m (28%) on the December quarter 2011 deficit of $4,120m. The increase in the balance on goods and services deficit, in seasonally adjusted chain volume terms, is expected to detract 0.5 percentage points from growth in the March quarter 2012 volume measure of GDP, assuming no significant revision to the GDP chain volume estimate for the December quarter 2011. Terms of Trade and Implicit Price Deflator Australia's seasonally adjusted terms of trade on net goods and services fell 4.3% to 117.5, with a decrease of 6.2% in the implicit price deflator (IPD) for goods and services credits and a decrease of 2.1% in the IPD for goods and services debits. In trend terms, the terms of trade for net goods and services fell 3.1% to 119.8. Goods The trend estimate of net goods at current prices was a surplus of $1,690m, a fall of $2,938m (63%) on the December quarter 2011 surplus of $4,628m. In seasonally adjusted terms at current prices, net goods recorded a surplus of $71m, a fall of $4,773m (99%) on the December quarter 2011 surplus of $4,844m.
Services
GOODS CREDITS The trend estimate of goods credits at current prices fell $2,050m (3%) to $64,688m in the March quarter 2012. In seasonally adjusted terms at current prices, goods credits fell $5,917m (9%) to $62,249m, with volumes down 1% and prices down 7%. Rural Goods Exports of rural goods, in seasonally adjusted terms at current prices, fell $845m (9%) to $8,062m, with volumes down 3% and prices down 7%. The main components contributing to the fall were:
Non-rural Goods Exports of non-rural goods, in seasonally adjusted terms at current prices, fell $3,914m (7%) to $50,726m, with prices down 8%. The main components contributing to the fall were:
Net Exports of Goods Under Merchanting Net exports of goods under merchanting, in seasonally adjusted terms at current prices, fell $8m (8%) to $90m, with volumes up 4% and prices down 12%. Non-monetary Gold Non-monetary gold, in original and seasonally adjusted terms at current prices, fell $1,150m (25%), with volumes down 23% and prices down 3%. GOODS DEBITS The trend estimate of goods debits at current prices rose $888m (1%) to $62,998m in the March quarter 2012. In seasonally adjusted terms at current prices, goods debits fell $1,144m (2%) to $62,178m, with prices down 2%. Consumption Goods Imports of consumption goods, in seasonally adjusted terms at current prices, rose $263m (2%) to $16,757m with volumes up 4% and prices down 3%. The main component contributing to the rise was non-industrial transport equipment, up $380m (9%), with volumes up 11% and prices down 1%. Partly offsetting this rise was the consumption goods n.e.s. component, down $102m (2%), with volumes up 4% and prices down 5%. Capital Goods Imports of capital goods, in seasonally adjusted terms at current prices, fell $135m (1%) to $17,019m with prices down 1%. The main components contributing to the fall were:
Partly offsetting these falls were:
Intermediate and Other Merchandise Goods Imports of intermediate and other merchandise goods, in seasonally adjusted terms at current prices, fell $703m (3%) to $26,894m, with volumes down 2%. The main components contributing to the fall were:
Non-monetary Gold Imports of non-monetary gold, in original and seasonally adjusted terms at current prices, fell $569m (27%) to $1,508m, with volumes down 24% and prices down 4%. SERVICES The trend estimate of net services at current prices was a deficit of $3,078m, a rise of $354m (13%) on the December quarter 2011 deficit of $2,724m. In seasonally adjusted terms at current prices, net services recorded a deficit of $3,133m, a rise of $543m (21%) on the December quarter 2011 deficit of $2,590m. Services Credits Services credits, in seasonally adjusted terms at current prices, fell $56m to $12,453m. The main component contributing to the fall was travel, down $52m (1%), with volumes down 1%. In seasonally adjusted terms, tourism related service credits fell $63m (1%) to $8,259m. Services Debits Services debits, in seasonally adjusted terms at current prices, rose $487m (3%) to $15,586m, with volumes up 7% and prices down 3%. The main components contributing to the rise were:
In seasonally adjusted terms, tourism related service debits rose $257m (3%) to $8,566m. PRIMARY INCOME The trend estimate of the net primary income deficit at current prices fell $96m (1%) in the March quarter 2012 to $11,623m. In seasonally adjusted terms, the net primary income deficit fell $72m (1%) in the March quarter 2012 to $11,668m. Primary Income Credits Primary income credits, in seasonally adjusted terms at current prices, fell $760m (7%) to $9,682m. The main components contributing to the fall were:
Primary Income Debits Primary income debits, in seasonally adjusted terms at current prices, fell $832m (4%) to $21,350m. The main components contributing to the fall were:
SECONDARY INCOME The trend estimate of the net secondary income deficit at current prices, rose $8m (5%) to $161m in the March quarter 2012. In seasonally adjusted terms, the net secondary income deficit at current prices, rose $10m (7%) to $163m in the March quarter 2012. FINANCIAL ACCOUNT The balance on financial account, in original terms, recorded a net inflow of $15.9b, with a net inflow of $10.4b of equity and a net inflow of $5.5b of debt. The financial account surplus increased $5.7b, from $10.2b in December quarter 2011 to $15.9b in March quarter 2012. Direct investment recorded a net inflow of $12.1b in March quarter 2012, a decrease of $10.1b from the net inflow of $22.2b in December quarter 2011, where:
Portfolio investment recorded a net inflow of $15.4b, an increase of $1.6b on the net inflow of $13.8b in December quarter 2011, where:
Financial derivatives recorded a net outflow of $5.9b, a turnaround of $5.9b from the net inflow of $0.03b in December quarter 2011. Other investment recorded a net outflow of $1.1b, a decrease of $21.0b from the net outflow of $22.1b in December quarter 2011. Reserve assets recorded a net outflow of $4.7b, an increase of $0.9b from the net outflow of $3.7b in December quarter 2011. INTERNATIONAL INVESTMENT POSITION ANALYSIS Australia's net international investment position at 31 March 2012 was a net foreign liability of $880.2b, up $23.8b on the 31 December 2011 position of $856.4b. The changes contributing to this result are shown in the following table.
SUPPLEMENTARY INFORMATION CONDITIONS The conditions in the global economy showed moderate increases for most countries in the March quarter 2012. According to the Organisation for Economic Cooperation and Development (OECD), preliminary real GDP estimates in seasonally adjusted terms showed movement in quarterly growth for: Japan (1.0%), USA (0.5%), Germany (0.5%), France (0.04%), UK (-0.3%) and overall OECD total of 0.4%. Australia's international investment activities during the quarter were as follows:
The Australian share market, as measured by the MSCI global index, increased 6.4% in March quarter 2012, following a 0.9% increase in December quarter 2011. There were increases in all major markets: Germany 17.5%, Singapore 15.5%, Hong Kong 13.0%, USA 12.2%, Europe ex UK 11.8%, France 9.2%, New Zealand 8.2%, Switzerland 5.4%, Canada 3.9% and United Kingdom 3.5%. A market price change of -$17.3b was recorded for foreign equity assets and $21.3b in foreign equity liabilities during March quarter 2012. According to Bloomberg, the composite corporate benchmark yield decreased in Australia from 6.6% to 6.1%, in the UK from 4.9% to 4.5%, in Germany from 4.4% to 3.2%, in USA from 3.9% to 3.5% and remained flat in Japan at 0.8%. Long term government bond yields increased or remained flat in the major markets in March quarter 2012. The 10 year government bond yields increased in the UK from 2.0% to 2.2% and in the USA from 1.9% to 2.2%, while they remained flat in Germany at 1.8% and Japan at 1.0%. In Australia, the rate increased from 3.8% to 4.2%. This is reflected in the market price changes for both portfolio debt securities liabilities (-$5.3b) and assets ($1.1b) in March quarter 2012. The Australian dollar appreciated against a number of the major currencies and fell against others in March quarter 2012. It increased 8.4% against the Japanese yen, 2.4% against the US dollar, 2.4% against the Hong Kong dollar and 2.2% against the Chinese renminbi. The Australian dollar fell 6.5% against the Swedish krona, 6.4% against the Swiss franc, 3.5% against the New Zealand dollar, 3.4% against the Norwegian kronor and 1.2% against the UK pound. The Trade Weighted Index (TWI) recorded an increase of 1.5%. The net impact of exchange rates was a decrease of $4.0b on foreign assets and an increase of $1.1b on foreign liabilities. RELATIONSHIP BETWEEN IPD, EPI AND IPI(footnote 1) In original terms, the IPD for total goods credits fell 7.3% and the chain Laspeyres price index for goods exports fell 6.8%. The export price index (EPI) fell 7.0% during the March quarter 2012. In original terms, the IPD for total goods debits fell 0.6% and the chain Laspeyres price index for goods imports fell 1.2%. The import price index (IPI) fell 1.2% during the March quarter 2012. 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. In the March quarter 2012, the difference between the IPD and EPI were mainly due to the 'meat and meat preparations', 'cereal grains and cereal preparations' and 'other rural' components.
Commodity Price Indexes The RBA Commodity Price Index(footnote 2) (average monthly index) for rural commodities decreased 1.7% between the December quarter 2011 and March quarter 2012 while the EPI for rural goods total decreased 3.3%. The RBA Commodity Price Index for non-rural commodities decreased 6.3% while the EPI for non-rural goods total (excluding non-monetary gold) decreased 7.8%. 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. 1 In this commentary movements in indexes are based on data to four decimal places. <back 2 For RBA Commodity Price Index methodology, see paragraph 23 of the Explanatory Notes. <back Document Selection These documents will be presented in a new window.
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