5302.0 - Balance of Payments and International Investment Position, Australia, Sep 2013 
Quality Declaration
Quality Declaration ARCHIVED ISSUE Released at 11:30 AM (CANBERRA TIME) 03/12/2013
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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 $8,486m, a rise of $2,867m (51%) on the June quarter 2013 surplus of $5,619m. The net surplus on goods rose $1,645m (19%) on the June quarter 2013 surplus of $8,545m. Goods credits rose $93m and goods debits fell $1,552m (2%). The net deficit on services fell $1,223m (42%) on the June quarter 2013 deficit of $2,926m. The increase in the balance on goods and services surplus, in seasonally adjusted chain volume terms, is expected to contribute 0.7 percentage points to growth in the September quarter 2013 volume measure of GDP, assuming no significant revision to the GDP chain volume estimate for the June quarter 2013. Terms of Trade and Implicit Price Deflator Australia's seasonally adjusted terms of trade on net goods and services for the September quarter 2013 fell 3.3% to 87.4 with an increase of 3.0% in the implicit price deflator (IPD) for goods and services credits and an increase of 6.5% in the IPD for goods and services debits. In trend terms, the terms of trade for net goods and services fell 0.9% to 88.6. Goods The trend estimate of net goods at current prices for the September quarter 2013 was a surplus of $990m, a rise of $486m (96%) on the June quarter 2013 surplus of $504m. In seasonally adjusted terms at current prices, net goods was a surplus of $96m, a fall of $183m (66%) on the June quarter 2013 surplus of $279m.
Services
GOODS CREDITS The trend estimate of goods credits at current prices rose $1,741m (3%) to $66,597m in the September quarter 2013. In seasonally adjusted terms at current prices, goods credits rose $2,253m (3%) to $66,916m, with prices up 3%. Rural Goods Exports of rural goods, in seasonally adjusted terms at current prices, rose $83m (1%) to $9,578m, with volumes down 3% and prices up 4%. The main component contributing to the rise was meat and meat preparations, up $239m (12%), with volumes up 7% and prices up 4%. Partly offsetting this rise was cereal grains and cereal preparations component, down $165m (7%), with volumes down 12% and prices up 6%. Non-rural Goods Exports of non-rural goods, in seasonally adjusted terms at current prices, rose $2,649m (5%) to $53,806m, with volumes up 2% and prices up 3%. 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, rose $7m (8%), with volumes up 3% and prices up 5%. Non-monetary Gold Non-monetary gold, in original and seasonally adjusted terms at current prices, fell $486m (12%), with volumes down 14% and prices up 2%. GOODS DEBITS The trend estimate of goods debits at current prices rose $1,255m (2%) to $65,607m in the September quarter 2013. In seasonally adjusted terms at current prices, goods debits rose $2,435m (4%) to $66,819m, with volumes down 2% and prices up 6%. CONSUMPTION GOODS Imports of consumption goods, in seasonally adjusted terms at current prices, rose $1,065m (6%) to $20,415m with prices up 6%. The main components contributing to the rise were:
Capital Goods Imports of capital goods, in seasonally adjusted terms at current prices, rose $1m to $16,836m with volumes down 7% and prices up 7%. The main components contributing to the rise were:
Partly offsetting these rises was the capital goods n.e.s. component, down $486m (11%), with volumes down 17% and prices up 8%. Intermediate and Other Merchandise Goods Imports of intermediate and other merchandise goods, in seasonally adjusted terms at current prices, rose $1,324m (5%) to $28,299m, with volumes down 2% and prices up 7%. The main components contributing to the rise were:
Non-monetary Gold Imports of non-monetary gold, in original and seasonally adjusted terms at current prices, rose $44m (4%) to $1,269m, with volumes up 2% and prices up 2%. SERVICES The trend estimate of net services at current prices was a deficit of $2,733m, a fall of $61m (2%) on the June quarter 2013 deficit of $2,794m. In seasonally adjusted terms at current prices, net services was a deficit of $2,671m, a fall of $271m (9%) on the June quarter 2013 deficit of $2,942m. Services Credits Services credits, in seasonally adjusted terms at current prices, rose $284m (2%) to $13,562m with volumes up 1% and prices up 1%. The main component contributing to the rise was travel, up $255m (3%), with volumes up 2% and prices up 1%. In seasonally adjusted terms, tourism related service credits rose $242m (3%) to $8,651m. Services Debits Services debits, in seasonally adjusted terms at current prices, rose $13m to $16,233m, with volumes down 7% and prices up 7%. The main component contributing to the rise was maintenance and repair services n.i.e., up $66m (71%), with volumes up 58% and prices up 9%. Partly offsetting this rise was the other services component, down $54m (1%), with volumes down 9% and prices up 9%. In seasonally adjusted terms, tourism related service debits fell $131m (2%) to $8,328m. PRIMARY INCOME The trend estimate of the net primary income deficit at current prices rose $355m (4%) to $9,294m in the September quarter 2013. The seasonally adjusted estimate of the net primary income deficit at current prices rose $706m (8%) to $9,619m in the September quarter 2013. Primary Income Credits Primary income credits, in seasonally adjusted terms at current prices, fell $797m (6%) to $11,797m mainly driven by a fall of $829m (16%) in direct investment assets, investment income on equity and investment fund shares. Primary Income Debits Primary income debits, in seasonally adjusted terms at current prices, fell $92m to $21,415m driven by a fall of $849m (20%) in portfolio investment liabilities, investment income on equity and investment fund shares. The fall was partly offset by a rise of $466m (8%) in portfolio investment income interest, a rise of $141m (8%) in other investment income liabilities and a rise of $77m (1%) in direct investment liabilities, investment income on equity and investment fund shares. SECONDARY INCOME The trend estimate of the net secondary income deficit at current prices, fell $18m (3%) to $515m in the September quarter 2013. In seasonally adjusted terms, the net secondary income deficit at current prices, rose $2m to $517m in the September quarter 2013. FINANCIAL ACCOUNT The balance on financial account, in original terms, recorded a net inflow of $15.1b, which was driven by a net inflow of debt of $17.8b partly offset by a net outflow of equity of $2.6b. The financial account surplus increased $6.5b to $15.1b in the September quarter 2013, from $8.6b in the June quarter 2013. Direct investment recorded a net inflow of $6.1b in the September quarter 2013, a decrease of $4.0b from the net inflow of $10.1b in the June quarter 2013. This was driven by direct investment liabilities which recorded an inflow of $11.0b, an increase of $0.1b on the inflow of $10.9b in the June quarter 2013, partly offset by direct investment assets which recorded an outflow of $4.9b, an increase of $4.1b on the outflow of $0.8b in the June quarter 2013. Portfolio investment recorded a net inflow of $7.6b, a decrease of $9.3b on the net inflow of $16.9b in the June quarter 2013. This was driven by a net inflow recorded for debt securities of $9.5b, a decrease of $1.0b on the inflow of $10.5b in the June quarter 2013, partly offset by equity and investment fund shares which recorded a net outflow of $1.9b, a turnaround of $8.3b on the inflow of $6.4b in the June quarter 2013. Financial derivatives recorded a net outflow of $6.7b, an increase of $3.7b from the net outflow of $3.0b in the June quarter 2013. Other investment recorded a net inflow of $8.5b, a turnaround of $25.5b from the net outflow of $17.0b in the June quarter 2013. This was driven by a net inflow of $7.8b of currency and deposits with deposit taking institutions, a turnaround of $20.1b on the net outflow of $12.4b in the June quarter 2013. Reserve assets recorded a net outflow of $0.4b, a turnaround of $2.0b from the net inflow of $1.6b in the June quarter 2013. INTERNATIONAL INVESTMENT POSITION ANALYSIS Australia's net international investment position at 30 September 2013 was a net foreign liability of $854.9b, up $42.9b on the 30 June 2013 position of $812.0b. 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 September quarter 2013. According to the Organisation for Economic Cooperation and Development (OECD)(footnote 1) , preliminary real GDP estimates in seasonally adjusted terms showed movement in quarterly growth for: China (2.2%), Korea (1.1%), UK (0.8%), USA (0.7%), Japan (0.5%), Germany (0.3%), Netherlands (0.1%), Spain (0.1%), Italy (-0.1%) and France (-0.1%). Australia's international investment activities during the quarter were as follows:
The Australian share market, as measured by the MSCI global index(footnote 2) , increased 8.1% in the September quarter 2013, compared to the 2.9% decrease in the June quarter 2013. There were increases in all major markets: Europe (excluding UK) 14.3%, France 10.7%, Germany 8.2%, Hong Kong 8.1%, New Zealand 6.5%, Canada 5.4%, Japan 4.7%, Switzerland 4.6%, United Kingdom 4.0% and Singapore 2.1%. A market price change of -$18.5b was recorded for foreign equity assets and $32.4b in foreign equity liabilities in the September quarter 2013. According to Bloomberg(footnote 3) , the composite corporate benchmark yield decreased in Australia from 4.40% to 4.25%, in UK from 3.74% to 3.64%, in the US from 3.44% to 3.38%, in Germany from 2.26% to 2.17% and in Japan from 0.62% to 0.53%. The long term 10 year government bond yields increased in the UK from 2.46% to 2.73%, in the US from 2.52% to 2.64% and in Germany from 1.73% to 1.78% while in Japan the rate decreased from 0.84% to 0.69%. In Australia, the rate increased from 3.54% to 4.00%. Market price changes were recorded for both portfolio debt securities liabilities of -$3.2b and assets of $2.8b in the September quarter 2013. The Australian dollar depreciated against a number of the major currencies in the September quarter 2013. It decreased 5.6% against the South Korean won, 5.3% against the New Zealand dollar, 5.1% against the UK pound sterling, 3.8% against the Swedish krona, 3.7% against the Swiss franc, 2.8% against the Euro, 2.0% against Danish krona, and 0.05% against Chinese renminbi. It also saw gains of 17.8% against the Indonesian rupiah, 10.3% against the PNG kina, 5.5% against the Indian rupee, 3.3% against the Malaysian ringgit, 3.0% against the Sri Lankan rupee, 2.7% against the Philippine peso, 2.2% against the South African rand and 0.37% against the US dollar. The Trade Weighted Index (TWI)(footnote 4) , (footnote 5) recorded a decrease of 0.3%. This is reflected in the exchange rate changes for foreign assets of $7.0b and foreign liabilities of $4.8b. RELATIONSHIP BETWEEN IPD, EPI AND IPI(footnote 6) In original terms, the IPD for total goods credits rose 4.4% and the chain Laspeyres price index for goods exports rose 4.3%. The export price index (EPI) rose 4.2% during the September quarter 2013. In original terms, the IPD for total goods debits rose 6.6% and the chain Laspeyres price index for goods imports rose 6.5%. The import price index (IPI) rose 6.1% during the September 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.
Commodity Price Indexes The RBA Commodity Price Index(footnote 7) (average monthly index) for rural commodities increased 2.7% between the June quarter 2013 and September quarter 2013 while the EPI for rural goods increased 6.0%. The RBA Commodity Price Index for non-rural commodities increased 4.5% while the EPI for non-rural goods total (excluding non-monetary gold) increased 4.0%. 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 Economic Outlook - Real Gross Domestic Product Forecast Nov 2013, Organisation for Economic Cooperation and Development - Economic Department, viewed 25 November 2013, http://www.oecd.org/eco/economicoutlook.htm> <back 2 MSCI All Country Indices 2013, Morgan Stanley Capital International, viewed 25 November 2013, http://www.msci.com/products/indices/country_and_regional/all_country/>. <back 3 Bloomberg, Blooming Corporate Services, viewed 25 November 2013. <back 4 Exchange Rates - Daily - 2010 to Current 2013, Reserve Bank of Australia - Statistical Tables, viewed 1 October 2013, http://www.rba.gov.au/statistics/tables/index.html> <back 5 Bloomberg, Blooming Corporate Services, viewed 1 October 2013 <back 6 In this commentary movements in indexes are based on data to four decimal places. <back 7 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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