Australia's current account deficit shrinks in Q3 2023

A significant factor in this development is the $8 billion drop in the balance on goods and services, which now stands at $22.8 billion. Concurrently, the net primary income deficit saw a slight improvement, narrowing by $0.4 billion to $22.3 billion. Australia’s terms of trade also experienced a decline, falling 2.6 per cent during the quarter.

The country saw a decrease in the exports of goods by 3.1 per cent, primarily due to reduced prices. However, the export of services told a different story, rising for the seventh consecutive quarter by 2.7 per cent. On the other hand, imports of goods and services saw an increase of 3.3 per cent, as per ABS.

The primary income deficit's narrowing to $22.3 billion can be attributed to lower profit results, a consequence of heightened cost pressures experienced in the first half of the year.

In the financial sector, Australia recorded a surplus of $3.4 billion. However, the $3.7 billion fall in net trade is projected to negatively impact the September quarter's GDP, potentially reducing it by 0.6 percentage points.

Another notable aspect of the quarter was Australia's net international investment liability position, which decreased by $27.8 billion to $814.7 billion. This reduction is primarily due to a more substantial increase in Australia's foreign assets compared to its foreign liabilities.

“The current account deficit reflected a reduced trade surplus, driven by falls key export commodities prices, while the net primary income deficit narrowed slightly,” said Grace Kim, ABS head of International Statistics.

Fibre2Fashion News Desk (DP)