5302.0 - Balance of Payments and International Investment Position, Australia, Jun 2003
ARCHIVED ISSUE Released at 11:30 AM (CANBERRA TIME) 28/08/2003
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JUNE QTR KEY FIGURES
JUNE QTR KEY POINTS BALANCE OF PAYMENTS
INTERNATIONAL INVESTMENT POSITION
NOTES CHANGES IN THIS ISSUE Beverages Commencing this quarter, the beverages component of other non-rural goods credits has been separately identified. Seasonal Factors Seasonally adjusted and trend estimates of beverages, sugar, other non-rural and cereals goods credits components of the current account have been revised due to the separate identification of beverages and compositional changes to cereals. New seasonal factors covering this change are available from the ABS web site (5302.0, Table 95). Chain Volume Measures Chain volume and associated price measures in this issue incorporate a new base year (2001-02) which has resulted in revisions to growth rates for the most recent financial years. The reference year has been advanced to 2001-02, resulting in revisions to levels, but not growth rates, for all periods. Revisions Table 41 summarises revisions, in original current price terms, since the last issue of this publication, for the last three years and six quarters. Incorporation of the latest survey and administrative data has resulted in revisions back to September quarter 1999. In particular, revisions to the international investment position have been made to the debt/equity split for managed funds for foreign investment in Australia, refining the significant revisions published in the June quarter 2002 issue of this publication. FEATURE ARTICLE A feature article on Australia's gross external debt is included in this issue. CHANGES IN FORTHCOMING ISSUES Seasonal Factors The seasonally adjusted and trend estimates of the current account will be revised in the next issue of this publication as a result of an annual seasonal reanalysis. The analysis will take account of additional data that have become available since the previous reanalysis. Revised historical and new forward seasonal factors will be released as part of the electronic version of this publication. Existing subscription clients to this data service should contact Kevin Yeadon on 02 6252 6255 or email k.yeadon@abs.gov.au. FURTHER INFORMATION For further information contact Tom Jebbink on 02 6252 6688 for balance of payments estimates, or Sawbhag Naidu on 02 6252 5541 for international investment estimates. BALANCE OF PAYMENTS CURRENT ACCOUNT The trend estimate of the balance on current account was a deficit of $12,144m in the June quarter 2003, an increase of $1,213m (11%) on the deficit recorded for the March quarter 2003. The main contributor to the increase in the deficit was goods credits, which fell $1,118m. In seasonally adjusted terms, the current account deficit rose $2,456m to $12,686m in the June quarter 2003. The net deficit on goods rose $2,164m to $6,465m. The net services deficit rose $94m to $468m. The net deficit on income rose $171m to $5,703m. GOODS AND SERVICES The trend estimate of the balance on goods and services at current prices was a deficit of $6,411m, an increase of $1,215m (23%) on the March quarter 2003 deficit of $5,196m. In seasonally adjusted current price terms, the balance on goods and services was a deficit of $6,933m. The deficit on goods was $6,465m, an increase of $2,164m on the deficit of $4,301m in the March quarter 2003. Lower goods exports, down $3,075m, were partly offset by lower goods imports, down $911m. Goods credits recorded decreases in most commodity groups, with rural goods down $831m (14%), non-rural goods down $1,332m (6%) and other goods down $912m (32%). The fall in goods debits was driven by falls in intermediate goods and other goods imports, down $1,578m (10%), partly offset by rises in capital goods, up $375m (5%), and consumption goods, up $292m (3%). In seasonally adjusted volume terms, the deficit on goods and services was $8,800m, an increase of $2,788m on the $6,012m deficit recorded for the March quarter 2003. The goods deficit rose $2,247m to $7,515m as goods credits fell $1,077m (4%) and goods debits rose $1,170m (3%). The net services balance was a deficit of $1,285m, a $541m increase on the March quarter 2003 deficit of $744m. The increase of $2,788m in the deficit on good and services in volume terms could be expected to make a contribution to growth of -1.5 percentage points in the June quarter 2003 volume measure of GDP, assuming no significant revision to the GDP chain volume estimate for the March quarter 2003 (other than re-referencing to 2001-02). GOODS CREDITS The trend estimate of goods credits fell $1,118m (4%) to $27,807m in the June quarter 2003. Seasonally adjusted, goods credits were $26,767m down $3,075m (10%) on the March quarter 2003. Rural goods (seasonally adjusted, current prices) decreased $831m (14%) to $5,304m, with both prices and volumes down 7%. The largest falls were in other rural goods, down $297m (10%), mainly due to a decrease in volumes, down 7%, with prices falling 3%; and wool and sheepskins, down $282m (32%), with volumes down 21% and prices down 14%. Non-rural goods (seasonally adjusted, current prices) fell $1,332m (6%) to $19,551m. Exports of coal, coke and briquettes recorded the largest decrease, down $374m (12%), with volumes down 5% and prices down 8%; followed by other mineral fuels, down $341m (12%), driven by a fall in prices of 19%; and metal ores and minerals, down $310m (8%), mainly due to a decrease in volumes. Other goods also recorded a decrease, down $912m (32%), with a fall in volumes of 25% and a decrease in prices of 9%. GOODS DEBITS The trend estimate of goods debits rose $53m to $33,806m in the June quarter 2003. In seasonally adjusted current price terms, goods debits fell $911m (3%) to $33,232m. Consumption goods imports (seasonally adjusted, current prices) rose $292m (3%) to $10,555m, with a rise in volumes of 6% and a fall in prices of 3%. This increase was driven by non-industrial transport equipment, up $221m (8%), due to an increase in volumes; textiles, clothing and footwear, up $113m (9%), with volumes up 16% and prices down 6%; food and beverages, mainly for consumption, up $95m (7%) on increased volumes; and household electrical items, up $54m (6%), driven by a 12% increase in volumes. Partly offsetting these increases were decreases in consumption goods n.e.s., down $144m (5%), on both decreased volumes and prices. Capital goods (seasonally adjusted, current prices) rose $375m (5%) to $7,800m, with a rise in volumes of 12% and a fall in prices of 6%. Contributing to this increase were rises in imports of civil aircraft, up $274m (44%), due to increased volumes; and ADP equipment, up $70m (6%), with volumes up 19% and prices down 11%. Slightly offsetting these increases were falls in imports of industrial transport equipment n.e.s., down $33m (3%), driven by a fall in prices. Intermediate goods and other goods (seasonally adjusted, current prices) fell $1,578m (10%) to $14,877, with a fall in volumes of 3% and a fall in prices of 6%. The largest fall was in the volatile fuels and lubricants, down $624m (20%), with volumes down 7% and prices down 14%; followed by goods for processing, down $482m (38%), driven by a decrease in volumes. Partly offsetting these decreases were increases in imports of organic and inorganic chemicals, up $104m (14%), with volumes up 20%. SERVICES The trend estimate of net services was a deficit of $412m, up $44m on the March quarter 2003 deficit. In seasonally adjusted terms, net services recorded a deficit of $468m, an increase of $94m on the deficit for the March quarter 2003. Services credits, in seasonally adjusted terms at current prices, fell $748m (9%) to $7,291m, due mainly to a decrease in volumes. Services debits, in seasonally adjusted terms at current prices, fell $654m (8%) to $7,759m, with prices down 6% and volumes down by 2%. The largest decreases in both services credits and debits were in passenger and travel services, largely due to reduced international travel following the SARS travel warnings. IMPLICIT PRICE DEFLATOR In seasonally adjusted terms, the implicit price deflator (IPD) for total goods and services credits fell 5.6%. In original terms, it fell by 5.7%. The chain Laspeyres price index for credits fell 5.6%, indicating that the compositional effects had no influence on the movement in the IPD. The IPD for goods credits fell 7.0% and the IPD for services credits rose 0.1%. The total goods and services debits IPD fell 5.8% in seasonally adjusted terms. In original terms, it fell by 5.9%. The chain Laspeyres price index for debits fell 5.1%, indicating that compositional effects had a downward influence on the movement in the IPD. RELATIONSHIP TO IPI AND EPI The goods exports IPD (in original terms) fell 6.7% while the chain Laspeyres price index for goods exports fell 7.1% and the exports price index (EPI) fell 6.5% during the June quarter 2003. During the June quarter 2003, the goods imports IPD (in original terms) fell 6.0% while the chain Laspeyres price index for goods imports fell 5.1% and the import price index (IPI) fell 5.0%. TERMS OF TRADE Australia's seasonally adjusted terms of trade rose 0.1% to 103.1, with a fall of 5.6% in the IPD for goods and services credits and a 5.8% decrease in the goods and services debits IPD. The trend estimate of the terms of trade increased 0.7% to 103.4. INCOME The trend estimate of the net income deficit rose $12m to $5,686m. In seasonally adjusted terms, the net income deficit rose $171m (3%) to $5,703m. Income credits fell $145m to $3,461m and income debits rose $26m to $9,164m. In original terms, income credits fell $265m (7%) to $3,375m and income debits fell $254m (3%) to $9,083m. CURRENT TRANSFERS In seasonally adjusted terms, net current transfers was a deficit of $50m, up $27m on the $23m deficit recorded in the March quarter 2003. Current transfer credits rose $1m and debits rose $28m. CAPITAL AND FINANCIAL ACCOUNT CAPITAL ACCOUNT In original terms, the capital account surplus was $249m, down $128m on the March quarter 2003 surplus. Capital transfer credits fell $134m (18%) to $615m, while capital transfer debits rose $13m (4%) to $339m. FINANCIAL ACCOUNT In original terms, the balance on financial account recorded a net inflow of $12.9b, with a $7.1b inflow on equity and a $5.8b inflow on debt. Direct investment in Australia recorded an inflow of $5.9b in the June quarter 2003, a $4.0b increase on the March quarter inflow of $1.9b. Australia's direct investment abroad recorded an outflow of $4.0b, up from the previous quarter's outflow of $2.6b. This is the tenth consecutive quarterly outflow, bringing the total outflow on Australia's direct investment abroad to $42.6b since the March quarter 2001. Portfolio investment recorded a net inflow of $14.7b, a $12.5b increase on the net inflow of $2.3b in March quarter 2003. Other investment recorded a net inflow of $6.4b, up $1.8b on the net inflow of $4.6b recorded in March quarter 2003. Reserve assets recorded a net outflow of $9.6b, due to an increase in foreign exchange reserves, a turnaround of $13.2b on the previous quarter's inflow of $3.6b. INTERNATIONAL INVESTMENT POSITION Australia's net international investment position at 30 June 2003 was a net foreign liability of $442b, up $9b on 31 March 2003. The increase consisted of:
During the June quarter 2003, the level of net equity liabilities rose $12b (17%) to $83b, reflecting exchange rate changes of $13b and new net equity raisings of $7b. This increase was partially offset by price changes of -$9b. During the June quarter 2003, the level of net debt liabilities fell $3b (1%) to $359b. Net new debt raising added $6b, price and other changes added a further $2b. This increase was partially offset by exchange rate changes of -$10b, following appreciation of the $A. FINANCIAL YEAR: 2002-2003 situation BALANCE OF PAYMENTS In original terms, the balance on current account for 2002-03 was a deficit of $42.5b, a 94% increase on the deficit of $21.9b recorded for 2001-02. The balance on goods and services deficit of $19.7b was an increase of $18.0b on the deficit of $1.6b recorded in 2001-02. Goods exports decreased $5.2b or 4% (due largely to a decrease in prices) while goods imports increased $12.3b or 10% (composed of a 16% increase in volumes and a 5% decrease in prices). The 2002-03 services deficit of $1.5b was an increase of $0.6b on the deficit of $0.9b in 2001-02. The 2002-03 net income deficit rose $2.3b, with an increase in income debits of $1.2b and a decrease in income credits of $1.1b. The balance on financial account recorded a net inflow of $41.6b, with a net inflow on debt of $45.6b and an outflow on net equity of $4.0b. This result was up $20.5b on the net inflow recorded for the previous year as a result of:
For 2002-03, the ratio of Australia's current account deficit to GDP, using the latest available GDP estimate (for the year ended March 2003), was 5.7%, compared with 3.1% for the previous year. INTERNATIONAL INVESTMENT POSITION Australia's net international investment position as at 30 June 2003 was a net foreign liability of $441.5b. This was up $44.8b (11%) on the position a year earlier as a result of:
During 2002-03, the level of net equity liabilities rose to $82.6b, up $15.0b (22%) on the previous year, with transactions of -$4.0b and price changes of -$2.2b outweighed by exchange rate changes of $21.1b. Net foreign debt rose to $359.0b, up $29.8b (9%) on the previous year, with transactions of $45.6b and other adjustments of $1.1b partially offset by exchange rate changes of -$15.9b, due to the appreciation of the $A over the year, and market price changes of -$1.0b. As at 30 June 2003, the ratio of Australia's net international investment position to GDP, using the latest available GDP estimate (for the year ended March 2003), was 59.5%. This compares with 55.7% one year ago and 51.9% one decade ago.
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