5302.0 - Balance of Payments and International Investment Position, Australia, Sep 2011
Quality Declaration
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ARCHIVED ISSUE Released at 11:30 AM (CANBERRA TIME) 06/12/2011
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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 $13,270m, a rise of $1,930m (17%) on the June quarter 2011 deficit of $11,340m. The September quarter 2011 result is the highest deficit on record. The net deficit on goods rose $1,482m (20%) on the June quarter 2011 deficit of $7,426m. Goods credits rose $1,845m (4%) and goods debits rose $3,327m (6%). The net deficit on services rose $450m (12%) on the June quarter 2011 deficit of $3,913m. The increase in the balance on goods and services deficit, in seasonally adjusted chain volume terms, is expected to detract 0.6 percentage points from growth in the September quarter 2011 volume measure of GDP, assuming no significant revision to the GDP chain volume estimate for the June quarter 2011. Terms of Trade and Implicit Price Deflator Australia's seasonally adjusted terms of trade on net goods and services rose 2.7% to 131.5 with an increase of 2.4% in the implicit price deflator (IPD) for goods and services credits and a decrease of 0.3% in the IPD for goods and services debits. In trend terms, the terms of trade for net goods and services rose 3.0% to 132.2. The September quarter 2011 terms of trade, in both trend and seasonally adjusted terms, were the highest on record. Goods The trend estimate of net goods at current prices was a surplus of $8,991m, a rise of $657m (8%) on the June quarter 2011 surplus of $8,334m. In seasonally adjusted terms at current prices, net goods recorded a surplus of $9,494m, a rise of $1,219m (15%) on the June quarter 2011 surplus of $8,275m.
Services
GOODS CREDITS The trend estimate of goods credits at current prices rose $3,122m (5%) to $68,662m in the September quarter 2011. In seasonally adjusted terms at current prices, goods credits rose $3,963m (6%) to $69,466m, with volumes up 4% and prices up 2%. Rural Goods Exports of rural goods, in seasonally adjusted terms at current prices, rose $296m (4%) to $8,752m, with volumes up 6% and prices down 2%. The main component contributing to the rise was other rural, up $226m (6%), with volumes up 7%. Non-rural Goods Exports of non-rural goods, in seasonally adjusted terms at current prices, rose $2,741m (5%) to $56,360m, with volumes up 3% and prices up 2%. The main components contributing to the rise were:
Partly offsetting these increases was the other mineral fuels component, down $465m (7%), with volumes down 8% and prices up 1%. Net Exports of Goods Under Merchanting Net exports of goods under merchanting, in seasonally adjusted terms at current prices, rose $6m (86%) to $13m, with volumes up 80% and prices up 2%. Non-monetary Gold Exports of non-monetary gold, in seasonally adjusted terms at current prices, rose $919m (27%) to $4,340m, with volumes up 11% and prices up 14%. GOODS DEBITS The trend estimate of goods debits at current prices rose $2,465m (4%) to $59,671m in the September quarter 2011. In seasonally adjusted terms at current prices, goods debits rose $2,744m (5%) to $59,972m, with volumes up 6% and prices down 1%. Consumption Goods Imports of consumption goods, in seasonally adjusted terms at current prices, rose $898m (6%) to $16,238m, with volumes up 6%. The main components contributing to the rise were:
Capital Goods Imports of capital goods, in seasonally adjusted terms at current prices, rose $1,566m (11%) to $15,289m with volumes up 11%. The main components contributing to the rise were:
Intermediate and Other Merchandise Goods Imports of intermediate and other merchandise goods, in seasonally adjusted terms at current prices, fell $252m (1%) to $26,764m, with volumes up 1% and prices down 2%. The main components contributing to the fall were:
Partly offsetting these decreases was the processed industrial supplies n.e.s. component, up $551m (10%), with volumes up 9%. Non-monetary Gold Imports of non-monetary gold, in seasonally adjusted terms at current prices, rose $531m (46%) to $1,680m, with volumes up 28% and prices up 14%. SERVICES The trend estimate of net services at current prices was a deficit of $2,572m, a rise of $346m (16%) on the June quarter 2011 deficit of $2,226m. In seasonally adjusted terms at current prices, net services recorded a deficit of $2,693m, a rise of $636m (31%) on the June quarter 2011 deficit of $2,057m. Services Credits Services credits, in seasonally adjusted terms at current prices, fell $528m (4%) to $12,118m with volumes down 5% and prices up 1%. The main component contributing to the fall was travel, down $509m (7%), with volumes down 7% and prices up 1%. In seasonally adjusted terms, tourism related service credits fell $538m (6%) to $7,794m. Services Debits Services debits, in seasonally adjusted terms at current prices, rose $107m (1%) to $14,810m, with volumes down 1% and prices up 2%. The main component contributing to the rise was transport, up $103m (3%), with volumes up 1% and prices up 2%. In seasonally adjusted terms, tourism related service debits rose $30m to $8,321m. PRIMARY INCOME The trend estimate of the net primary income deficit at current prices decreased $538m (4%) in the September quarter 2011 to $12,410m. In seasonally adjusted terms, the net primary income deficit decreased $420m (3%) in the September quarter 2011 to $12,364m. Primary Income Credits Primary income credits, in seasonally adjusted terms at current prices, increased $286m (3%) to $10,325m. The main contributors to the increase were:
Partly offsetting these increases was a $101m (4%) decrease in portfolio investment assets, interest. Primary Income Debits Primary income debits, in seasonally adjusted terms at current prices, decreased $135m (1%) to $22,688m. The main contributor to the decrease was a $716m (9%) decrease in portfolio investment liabilities, interest. Partly offsetting this decrease was a $450m (5%) increase in direct investment liabilities, income on equity and investment fund shares. SECONDARY INCOME In trend terms, the net secondary income deficit at current prices, fell $19m (21%) in the September quarter 2011 to $70m. In seasonally adjusted terms, the net secondary income deficit at current prices, fell $20m (21%) in the September quarter 2011 to $74m. FINANCIAL ACCOUNT The balance on financial account, in original terms, recorded a net inflow of $8.0b, with a net inflow of $4.3b of equity and a net inflow of $3.7b of debt. The financial account surplus increased $3.3b from $4.7b in June quarter 2011 to $8.0b in September quarter 2011. Direct investment recorded a net inflow of $5.3b in September quarter 2011, a decrease of $12.9b from the net inflow of $18.2b in June quarter 2011, where:
Portfolio investment recorded a net inflow of $21.6b, a turnaround of $25.7b on the net outflow of $4.0b in June quarter 2011, where:
Financial derivatives recorded a net outflow of $17.8b, an increase of $14.1b from the net outflow of $3.7b in June quarter 2011. The main contributor was deposit-taking corporations, except the central bank with a net outflow of $11.8b. Other investment recorded a net outflow of $0.7b, a turnaround of $1.4b from the net inflow of $0.7b in June quarter 2011. Reserve assets recorded a net outflow of $0.3b, a decrease of $6.1b from the net outflow of $6.4b in June quarter 2011. INTERNATIONAL INVESTMENT POSITION ANALYSIS Australia's net international investment position at 30 September 2011 was a net foreign liability of $848.3b, up $50.6b on the 30 June 2011 position of $797.7b. The changes contributing to this result are shown in the following table.
SUPPLEMENTARY INFORMATION CONDITIONS Economic indicators showed moderate increases for most countries in the September quarter 2011. According to the Organisation for Economic Cooperation and Development (OECD), preliminary real GDP estimates in seasonally adjusted terms showed positive quarterly growth for: Japan (1.5%), Germany (0.5%), UK (0.5%), USA (0.5%), France (0.4%) and OECD total (0.6%). Australia's international investment activities decreased substantially during the quarter:
The Australian share market, as measured by the MSCI global index, decreased 13.4% in September quarter 2011, following a 4.7% decrease in June quarter 2011. There were decreases in all major markets: Germany -25.4%, France -24.5%, Hong Kong -20.5%, Europe ex UK -15.3%, Singapore -14.6%, USA -14.5%, United Kingdom -13.6%, Canada -12.9%, Japan -11.5%, Switzerland -11.0% and New Zealand -1.5%. A market price change of $80.4b was recorded for foreign equity assets and -$60.7b in foreign equity liabilities during September quarter 2011. According to Reuters, the composite corporate benchmark yield decreased in Australia from 6.40% to 6.10%, UK (4.60% to 4.00%), USA (4.00% to 3.10%), Germany (3.90% to 3.40%) and Japan (1.40% to 1.20%). Long term government bond yields decreased in all major markets over September quarter 2011. The 10 year government bond yields decreased in the UK (3.38% to 2.42%), USA (3.18% to 1.92%), Germany (3.01% to 1.86%) and Japan (1.14% to 1.03%). In Australia, the rate decreased from 5.16% to 4.20%. This is reflected in the market price changes for both portfolio debt securities liabilities ($13.0b) and assets ($1.4b) in September quarter 2011. The Australian dollar depreciated against a number of the major currencies in the September quarter 2011. It decreased against the Japanese yen (-13.3%), Chinese renminbi (-10.0%), US dollar (-8.9%), Hong Kong dollar (-8.8%), UK pound sterling (-6.0%), Singapore dollar (-3.9%), Malaysian ringgit (-3.8%), European euro (-2.6%), Canadian dollar (-2.2%), New Zealand dollar (-1.5%) and Swiss franc (-1.5%). The Trade Weighted Index (TWI) recorded a decrease of 6.9%. The net impact of exchange rate changes was an increase of $33.7b in foreign assets and $44.2b in foreign liabilities. RELATIONSHIP BETWEEN IPD, EPI AND IPI(footnote 1) In original terms, the IPD for total goods credits rose 2.5% and the chain Laspeyres price index for goods exports rose 2.7%. The export price index (EPI) rose 4.0% during the September quarter 2011. In original terms, the IPD for total goods debits fell 0.4% and the chain Laspeyres price index for goods imports rose 0.3%. The import price index (IPI) remained steady at 117.1 during the September quarter 2011. 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 September quarter 2011, the difference between the IPD and EPI were mainly due to the 'cereal grains and cereal preparations', 'other rural' and 'coal, coke and briquettes' components.
Commodity Price Indexes The RBA Commodity Price Index(footnote 2) (average monthly index) for rural commodities decreased 3.5% between the June 2011 and September 2011 quarters while the EPI for rural goods total increased 2.0%. The RBA Commodity Price Index for non-rural commodities increased 3.8% while the EPI for non-rural goods total (excluding non-monetary gold) increased 3.4%. 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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