5302.0 - Balance of Payments and International Investment Position, Australia, June 2013 
Quality Declaration
Quality Declaration ARCHIVED ISSUE Released at 11:30 AM (CANBERRA TIME) 03/09/2013
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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 surplus of $7,152m, a fall of $154m (2%) on the March quarter 2013 surplus of $7,306m. The net surplus on goods fell $595m (5%) on the March quarter 2013 surplus of $11,076m. Goods credits rose $1,028m (1%) and goods debits rose $1,623m (3%). The net deficit on services fell $441m (12%) on the March quarter 2013 deficit of $3,770m. The decrease in the balance on goods and services surplus, in seasonally adjusted chain volume terms, is expected to detract 0.04 percentage points from growth in the June quarter 2013 volume measure of GDP, assuming no significant revision to the GDP chain volume estimate for the March quarter 2013. Terms of Trade and Implicit Price Deflator(footnote 1) Australia's seasonally adjusted terms of trade on net goods and services for the June quarter 2013 rose 0.1% to 91.5 with an increase of 0.9% in the implicit price deflator (IPD) for goods and services credits and an increase of 0.7% in the IPD for goods and services debits. In trend terms, the terms of trade for net goods and services rose 1.1% to 91.3. Goods The trend estimate of net goods at current prices for the June quarter 2013 was a surplus of $3,425m, a rise of $2,212m (182%) on the March quarter 2013 surplus of $1,213m. In seasonally adjusted terms at current prices, net goods was a surplus of $2,886m, a fall of $197m (6%) on the March quarter 2013 surplus of $3,083m.
Services
GOODS CREDITS The trend estimate of goods credits at current prices rose $1,851m (3%) to $64,551m in the June quarter 2013. In seasonally adjusted terms at current prices, goods credits rose $1,513m (2%) to $64,740m, with volumes up 1% and prices up 1%. Rural Goods Exports of rural goods, in seasonally adjusted terms at current prices, rose $431m (5%) to $9,536m, with volumes up 5%. The main components contributing to the rise were:
Non-rural Goods Exports of non-rural goods, in seasonally adjusted terms at current prices, rose $1,072m (2%) to $51,258m, with volumes up 1% and prices up 2%. The main components contributing to the rise were:
Net Exports of Goods Under Merchanting Net exports of goods under merchanting, in seasonally adjusted terms at current prices, fell $23m (38%), with volumes down 37% and prices down 1%. Non-monetary Gold Non-monetary gold, in original and seasonally adjusted terms at current prices, rose $32m (1%), with volumes up 10% and prices down 9%. GOODS DEBITS The trend estimate of goods debits at current prices fell $360m (1%) to $61,126m in the June quarter 2013. In seasonally adjusted terms at current prices, goods debits rose $1,709m (3%) to $61,853m,with volumes up 3%. Consumption Goods Imports of consumption goods, in seasonally adjusted terms at current prices, fell $239m (1%) to $17,413m with volumes down 2% and prices up 1%. The main component contributing to the fall was non-industrial transport equipment, down $206m (4%), with volumes down 3% and prices down 1%. Capital Goods Imports of capital goods, in seasonally adjusted terms at current prices, rose $1,569m (10%) to $16,532m with volumes up 9% and prices up 2%. The main components contributing to the rise were:
Partly offsetting these rises was the ADP equipment component, down $160m (8%), with volumes down 12% and prices up 5%. Intermediate and Other Merchandise Goods Imports of intermediate and other merchandise goods, in seasonally adjusted terms at current prices, rose $244m (1%) to $26,696m, with volumes up 2% and prices down 1%. The main components contributing to the rise were:
Partly offsetting these rises was the other parts for capital goods component, down $112m (3%), with volumes down 5% and prices up 1%. Non-monetary Gold Imports of non-monetary gold, in original and seasonally adjusted terms at current prices, rose $136m (13%) to $1,213m, with volumes up 24% and prices down 10%. SERVICES The trend estimate of net services at current prices was a deficit of $2,914m, a fall of $54m (2%) on the March quarter 2013 deficit of $2,968m. In seasonally adjusted terms at current prices, net services was a deficit of $2,904m, a fall of $57m (2%) on the March quarter 2013 deficit of $2,961m. Services Credits Services credits, in seasonally adjusted terms at current prices, rose $103m (1%) to $13,154m with prices up 1%. The main component contributing to the rise was travel, up $94m (1%), with prices up 1%. In seasonally adjusted terms, tourism related service credits rose $73m (1%) to $8,261m. Services Debits Services debits, in seasonally adjusted terms at current prices, rose $46m to $16,058m, with volumes down 3% and prices up 3%. The main component contributing to the rise was other services, up $111m (2%), with volumes down 2% and prices up 4%. Partly offsetting this rise was the maintenance and repair services n.i.e. component, down $67m (42%), with volumes down 44% and prices up 4%. In seasonally adjusted terms, tourism related service debits fell $32m to $8,339m. PRIMARY INCOME The trend estimate of the net primary income deficit at current prices fell $161m (2%) to $8,741m in the June quarter 2013. In seasonally adjusted terms, the net primary income deficit rose $479m (6%) to $9,008m in the June quarter 2013. Primary Income Credits Primary income credits, in seasonally adjusted terms at current prices, rose $512m (5%) to $10,977m. The main components contributing to the rise were:
Partly offsetting these rises was a $11m (22%) fall in reserve assets. Primary Income Debits Primary income debits, in seasonally adjusted terms at current prices, rose $991m (5%) to $19,985m. The main components contributing to the rise were:
Partly offsetting these rises was a $107m (10%) fall in compensation of employees. SECONDARY INCOME The trend estimate of the net secondary income deficit at current prices, fell $2m (1%) to $326m in the June quarter 2013. In seasonally adjusted terms, the net secondary income deficit at current prices, fell $9m (3%) to $324m in the June quarter 2013. FINANCIAL ACCOUNT The balance on financial account, in original terms, recorded a net inflow of $5.6b, with a net inflow of $14.0b of equity and a net outflow of $8.4b of debt. The financial account surplus decreased $4.7b, from $10.3b in the March quarter 2013 to $5.6b in the June quarter 2013. Direct investment recorded a net inflow of $13.2b in the June quarter 2013, an increase of $4.3b from the net inflow of $8.9b in the March quarter 2013, where:
Portfolio investment recorded a net inflow of $13.6b, an increase of $0.3b on the net inflow of $13.4b in the March quarter 2013, where:
Financial derivatives recorded a net outflow of $2.8b, an increase of $0.9b from the net outflow of $1.9b in the March quarter 2013. Other investment recorded a net outflow of $20.1b, an increase of $12.0b from the net outflow of $8.1b in the March quarter 2013. Reserve assets recorded a net inflow of $1.6b, a turnaround of $3.6b from the net outflow of $2.0b in the March quarter 2013. INTERNATIONAL INVESTMENT POSITION ANALYSIS Australia's net international investment position at 30 June 2013 was a net foreign liability of $816.9b, down $31.8b on the 31 March 2013 position of $848.7b. 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 June quarter 2013. According to the Organisation for Economic Cooperation and Development (OECD), preliminary real GDP estimates in seasonally adjusted terms showed movement in quarterly growth for: China (1.7%), Korea (1.1%), Germany (0.7%), Japan (0.6%), UK (0.6%), France (0.5%), USA (0.4%), Spain (-0.1%), Italy (-0.2%) and Netherlands (-0.2%). Australia's international investment activities during the quarter were as follows:
The Australian share market, as measured by the MSCI global index, decreased 2.9% in the June quarter 2013, compared to the 7.3% increase in the March quarter 2013. There were decreases in: Hong Kong 6.0%, Singapore 5.6%, Canada 4.5%, the UK 3.2%, New Zealand 2.8%, Switzerland 1.7%, Europe ex UK 1.4%, Germany 0.7% and France 0.4%. Market increases were seen in Japan 10.1% and the USA 2.2%. A market price change of $18.7b was recorded for foreign equity assets and -$28.9b in foreign equity liabilities during the June quarter 2013. According to Bloomberg, the composite corporate benchmark yield increased in Australia from 4.36% to 4.40%, in the UK from 3.30% to 3.74%, in the USA from 2.83% to 3.44%, in Germany from 2.02% to 2.26% and in Japan from 0.51% to 0.62%. The long term 10 year government bond yields increased in the UK from 1.78% to 2.46%, in the USA from 1.87% to 2.52%, in Germany from 1.28% to 1.73% and in Japan from 0.56% to 0.84%. In Australia, the rate increased from 3.51% to 3.54%. Market price changes were recorded for both portfolio debt securities liabilities of -$5.9b and assets of $1.3b in the June quarter 2013. The Australian dollar depreciated against a number of the major currencies in the June quarter 2013. It decreased 13.5% against Danish krona, 13.0% against the Euro, 12.0% against the Chinese renminbi, 11.9% against Swiss franc, 11.9% against UK pound sterling, 11.0% against US dollar, 8.5% against Canadian dollar and 6.6% against Japanese yen. The Trade Weighted Index (TWI) recorded a decrease of 9.7%. This is reflected in the exchange rate changes for foreign assets of -$87.5b and foreign liabilities of $58.4b. RELATIONSHIP BETWEEN IPD, EPI AND IPI(footnote 1) In original terms, the IPD for total goods credits rose 0.2% and the chain Laspeyres price index for goods exports rose 0.7%. The export price index (EPI) fell 0.3% during the June quarter 2013. In original terms, the IPD for total goods debits fell 0.2% and the chain Laspeyres price index for goods imports fell 0.1%. The import price index (IPI) fell 0.3% during the June quarter 2013. 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 June quarter 2013, differences between the IPD and EPI were mainly due to the 'wool and sheepskins', 'meat and meat preparations' and 'coal, coke and briquettes' components.
Commodity Price Indexes The RBA Commodity Price Index(footnote 2) (average monthly index) for rural commodities increased 0.8% between the March quarter 2013 and June quarter 2013 while the EPI for rural goods increased 1.2%. The RBA Commodity Price Index for non-rural commodities decreased 0.3% while the EPI for non-rural goods total (excluding non-monetary gold) increased 0.1%. 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. FINANCIAL YEAR 2012-13 SITUATION CURRENT ACCOUNT In original terms, the balance on current account for 2012-13 was a deficit of $47.7b, an increase of $7.4b (18%) on the deficit of $40.3b recorded for 2011-12. The balance on goods and services was a deficit of $10.5b, a turnaround of $14.3b on the surplus of $3.8b recorded in 2011-12. Goods and services credits decreased $15.3b (5%) and goods and services debits decreased $1.0b. The 2012-13 net primary income deficit decreased $6.8b (16%), with a decrease in primary income credits of $0.7b (2%) and a decrease in primary income debits of $7.5b (9%). The 2012-13 net secondary income deficit decreased $0.1b (9%), with an increase in secondary income credits of $0.1b (1%) and a decrease in secondary income debits of $0.1b (1%). FINANCIAL ACCOUNT The balance on financial account recorded a net inflow of $48.2b, with a net inflow on equity of $32.1b and a net inflow on debt of $16.2b. This result was up $8.2b on the net inflow of $40.0b recorded for the previous year as a result of:
INTERNATIONAL INVESTMENT POSITION Australia's net international investment position as at 30 June 2013 was a net foreign liability of $816.9b. This was down $14.2b (2%) on the position a year earlier as a result of:
During 2012-13, Australia's net foreign equity liability decreased to $54.8b, down $43.2b on the previous financial year, with exchange rate changes of -$46.7b, price changes of -$24.6b and other changes of -$3.9b, partially offset by net transactions of $32.1b. Australia's net foreign debt liability rose to $762.2b, up $29.0b (4%) on the previous financial year, with exchange rate changes of $22.9b, net transactions of $16.2b and other changes of $0.8b, partially offset by price changes of -$10.9b. At 30 June 2013, the ratio of Australia's net international investment position to GDP using the latest available GDP figure (for the year ended 31 March 2013 using current prices) was 54.8%. This compares with 56.4% one year ago and 51.5% one decade ago. 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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