5302.0 - Balance of Payments and International Investment Position, Australia, Sep 2015 
Quality Declaration
Quality Declaration ARCHIVED ISSUE Released at 11:30 AM (CANBERRA TIME) 01/12/2015
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ANALYSIS AND COMMENTS
In seasonally adjusted current price terms, the September quarter 2015 current account deficit was $18,104m, a decrease of $2,402m (12%) on the June quarter 2015 deficit. In trend current price terms, the September quarter 2015 current account deficit was $19,699m, an increase of $2,235m (13%) on the June quarter 2015 deficit. The contributors to the current account balances, in seasonally adjusted and trend terms at current prices, are shown in the following table.
TERMS OF TRADE(footnote 1) Australia's seasonally adjusted terms of trade on net goods and services for the September quarter 2015 fell 2.4% to 83.3, with an increase of 0.4% in the implicit price deflator (IPD) for goods and services credits and an increase of 2.9% in the IPD for goods and services debits. In trend terms, the terms of trade for net goods and services fell 2.9% to 83.4. BALANCE ON GOODS AND SERVICES In seasonally adjusted chain volume terms, the balance on goods and services was a surplus of $8,287m, an increase of $6,109m on the June quarter 2015 surplus of $2,178m. The net surplus on goods increased $5,102m (149%) on the June quarter 2015 surplus of $3,432m. Goods credits rose $3,878m (5%) and goods debits fell $1,224m (2%). The net deficit on services decreased $1,007m (80%) on the June quarter 2015 deficit of $1,254m. The increase in the balance on goods and services surplus, in seasonally adjusted chain volume terms, is expected to contribute 1.5 percentage points to growth in the September quarter 2015 volume measure of GDP, assuming no significant revision to the GDP chain volume estimate for the June quarter 2015. Goods The trend estimate of net goods at current prices for the September quarter 2015 was a deficit of $7,228m, an increase of $1,507m (26%) on the June quarter 2015 deficit of $5,721m. In seasonally adjusted terms at current prices, net goods was a deficit of $5,333m, a decrease of $3,305m (38%) on the June quarter 2015 deficit of $8,638m.
GOODS CREDITS The trend estimate of goods credits at current prices fell $643m (1%) to $62,723m in the September quarter 2015. In seasonally adjusted terms at current prices, goods credits rose $3,614m (6%) to $64,336m, with volumes up 5%. Rural Goods Exports of rural goods, in seasonally adjusted terms at current prices, fell $45m to $11,189m, with volumes down 6% and prices up 6%. The main component contributing to the fall was wool and sheepskins, down $71m (8%), with volumes down 21% and prices up 17%. Partly offsetting this fall was cereal grains and cereal preparations, up $16m (1%), with volumes down 5% and prices up 6%. Non-rural Goods Exports of non-rural goods, in seasonally adjusted terms at current prices, rose $2,000m (4%) to $48,466m, with volumes up 5% and prices down 1%. 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 $11m (11%), with volumes up 11%. Non-monetary Gold Non-monetary gold, in original and seasonally adjusted terms at current prices, rose $1,648m (56%), with volumes up 58% and prices down 1%. GOODS DEBITS The trend estimate of goods debits at current prices rose $865m (1%) to $69,951m in the September quarter 2015. In seasonally adjusted terms at current prices, goods debits rose $310m to $69,670m, with volumes down 2% and prices up 2%. Consumption Goods Imports of consumption goods, in seasonally adjusted terms at current prices rose $1,124m (5%), with volumes up 1% and prices up 4%. The main components contributing to the rise were:
Capital Goods Imports of capital goods, in seasonally adjusted terms at current prices rose $855m (5%) to $16,496m, with volumes up 1% and prices up 5%. The main component contributing to the rise was civil aircraft and confidentialised items, up $1,048m (86%), with volumes up 77% and prices up 6%. Partly offsetting this rise was machinery and industrial equipment, down $218m (4%), with volumes down 9% and prices up 5%. Intermediate and Other Merchandise Goods Imports of intermediate and other merchandise goods, in seasonally adjusted terms at current prices fell $1,819m (6%), with volumes down 5% and prices down 1%. 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, rose $150m (15%), with volumes up 14% and prices up 1%. SERVICES The trend estimate of net services at current prices was a deficit of $2,236m, an increase of $78m (4%) on the June quarter 2015 deficit of $2,158m. In seasonally adjusted terms at current prices, net services was a deficit of $2,105m, a decrease of $203m (9%) on the June quarter 2015 deficit of $2,308m.
Services Credits Services credits, in seasonally adjusted terms at current prices, rose $200m (1%) to $16,101m, with volumes up 1%. The main component contributing to the rise was travel, up $195m (2%), with volumes up 2%. In seasonally adjusted terms, tourism related services credits rose $176m (2%) to $10,462m. Services Debits Services debits, in seasonally adjusted terms at current prices, fell $2m to $18,206m, with volumes down 5% and prices up 5%. The main component contributing to the fall was transport, down $60m (1%) with volumes down 5% and prices up 3%. Passenger transport fell $45m (3%), with volumes down 7% and prices up 5% and freight transport fell $40m (2%), with volumes down 4% and prices up 3%. Partly offsetting this fall were:
In seasonally adjusted terms, tourism related services debits fell $12m to $8,852m. PRIMARY INCOME The trend estimate of the net primary income at current prices increased $653m (7%) to $9,629m in the September quarter 2015. The seasonally adjusted estimate of the net primary income deficit at current prices increased $1,106m (12%) to $10,054m in the September quarter 2015. Primary Income Credits Primary income credits, in seasonally adjusted terms at current prices, fell $344m (3%) to $13,031m. The main component contributing to this fall was direct investment income on equity and investment fund shares, down $424m (8%). Primary Income Debits Primary income debits, in seasonally adjusted terms at current prices, rose $761m (3%) to $23,084m. The main components contributing to this movement were portfolio investment interest, up $476m (8%) and portfolio investment income on equity and investment fund shares, up $377m (8%). SECONDARY INCOME The trend estimate of the net secondary income deficit at current prices decreased $3m to $607m in the September quarter 2015. In seasonally adjusted terms, the net secondary income deficit at current prices increased $1m to $613m in the September quarter 2015. CAPITAL ACCOUNT In original terms, the capital account deficit was $113m, a decrease of $42m (27%) on the June quarter 2015 deficit of $155m. Capital account credits rose $4m and capital account debits fell $38m (25%) in the September quarter 2015. FINANCIAL ACCOUNT The balance on financial account, in original terms, recorded a net inflow of $18.9b, which was driven by a net inflow of equity of $12.7b and a net inflow of debt of $6.2b. The financial account surplus increased $5.3b to $18.9b in the September quarter 2015, from $13.6b in the June quarter 2015. Direct Investment Direct investment recorded a net inflow of $4.5b in the September quarter 2015, a decrease of $0.6b on the inflow of $5.1b in the June quarter 2015, where:
Portfolio Investment Portfolio investment recorded a net inflow of $5.7b in the September quarter 2015, a decrease of $12.3b on the inflow of $18.0b in the June quarter 2015, where:
Financial Derivatives Financial derivatives recorded a net inflow of $3.9b in the September quarter 2015, an increase of $1.0b on the inflow of $2.9b in the June quarter 2015. Other Investment Other investment recorded a net inflow of $3.6b in the September quarter 2015, a turnaround of $22.8b on the outflow of $19.2b in the June quarter 2015. This was driven by a net inflow in currency and deposits of $12.0b, partly offset by a net outflow in loans of $5.4b and other accounts receivable of $4.0b. Reserve Assets Reserve assets recorded an inflow of $1.2b, a decrease of $5.5b on the inflow of $6.7b in the June quarter 2015. This was driven by the RBA’s inflow of debt securities of $2.2b, partly offset by an outflow in currency and deposits of $1.1b. INTERNATIONAL INVESTMENT POSITION (IIP) Australia's net International Investment Position was a liability of $922.8b at 30 September 2015, an increase of $18.2b (2%) on the 30 June 2015 position of $904.6b. Australia's net foreign debt liabilities increased $25.5b (3%) to a net liability position of $993.8b. Australia's net foreign equity assets increased $7.4b (12%) to a net asset position of $71.0b at 30 September 2015. The changes contributing to this result are shown in the following table.
SUPPLEMENTARY INFORMATION CONDITIONS The conditions in the global economy showed modest growth for most countries in the September quarter 2015. According to the Organisation for Economic Cooperation and Development (OECD)(footnote 2) , preliminary growth rates compared to last quarter in seasonally adjusted terms showed quarterly growth for China (1.8%), South Korea (1.2%), Indonesia (1.2%), UK (0.5%), France (0.3%), Germany (0.3%), Euro area (0.3%) and Netherlands (0.1%). Quarterly growth rates fell for Japan (0.2%) and Greece (0.5%).
The Australian share market, as measured by the MSCI global index(footnote 3) , decreased 10.7% in the September quarter 2015, following a decrease of 7.6% in the June quarter 2015. Decreases were recorded in Hong Kong (17.8%), Singapore (16.6%), Japan (16.5%), Germany (13.0%), Canada (10.4%), UK (9.8%), France (9.1%), USA (9.0%), Switzerland (4.9%) and New Zealand (4.0%). No increases were recorded. A decrease in market price in foreign equity assets of $70.2b was recorded in the September quarter 2015 and a decrease of $32.2b in foreign equity liabilities. According to Bloomberg(footnote 4), the composite corporate benchmark yield increased in the USA from 3.35% to 3.45%, the UK from 3.15% to 3.16%, Germany from 1.48% to 1.58%, but stayed the same in Japan at 0.34%. In Australia, the rate decreased from 3.57% to 3.45%. The long-term 10 year government bond yields decreased in all major markets: the USA from 2.35% to 2.06%, the UK from 2.01% to 1.76%, Japan from 0.44% to 0.35% and Germany from 0.77% to 0.59%. In Australia, the rate decreased from 2.98% to 2.61%. An increase in market price in portfolio debt securities assets of $0.2b was recorded in the September quarter 2015 and an increase of $2.4b in portfolio debt securities liabilities. The Australian dollar depreciated against a number of the major currencies in the September quarter 2015. It decreased 10.5% against the Japanese Yen, 9.2% against the European euro, 8.7% against the US dollar and 5.4% against the UK pound sterling and 2.62% against the New Zealand dollar. The Trade Weighted Index (TWI) (footnote 4) (footnote 5) , recorded a fall of 6.1%. An increase in exchange rate in foreign assets of $104.9b was recorded in the September quarter 2015 and an increase of $74.0b in foreign liabilities. RELATIONSHIP BETWEEN IPD, EPI AND IPI(footnote 6) In original terms, the IPD for total goods credits fell 0.3% and the chain Laspeyres price index for goods exports fell 0.1%. The Export Price Index (EPI)(footnote 7) remained steady at 80.9 during the September quarter 2015. In original terms, the IPD for total goods debits rose 2.6% and the chain Laspeyres price index for goods imports rose 1.8%. The Import Price Index (IPI) (footnote 7) rose 1.4% during the September quarter 2015. 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 (average monthly index) for rural commodities increased 2.2% between the June and September quarter 2015 while the EPI for rural goods increased 5.7%. The RBA Commodity Price Index for non-rural commodities increased 0.8% while the EPI for non-rural goods total (excluding non-monetary gold) decreased 1.3%. 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 OECD Statistics Quarterly National Account, Organisation for Economic Cooperation and Development – Economic Department, viewed 18 November 2015. <back 3 MSCI Global Market Indexes 2015, Morgan Stanley Capital International, viewed 8 October 2015. <back 4 Bloomberg, Bloomberg Professional Service, viewed 12 October 2015. <back 5 Exchange Rates – Daily 2015 to Current, Reserve Bank of Australia – Statistical Tables, viewed 2 October 2015. <back 6 In this commentary movements in indexes are based on data to four decimal places. <back 7 Source: International Trade Price Indexes, Australia (cat. no. 6457.0). <back Document Selection These documents will be presented in a new window.
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