Current account surplus narrows to $1b

Liza Kappelle
(Australian Associated Press)


Australia’s current account is in surplus for a third consecutive quarter but it shrank by $5.5 billion to $955 million in the December quarter.

The result is lower than the market’s anticipated $2.4 billion surplus, which slips from a downwardly revised $6.5 billion in the September quarter.

Tuesday’s seasonally adjusted figures from the Australian Bureau of Statistics showed exports of non-rural goods fell by 6.0 per cent as prices for metal ores, minerals, coal and mineral fuels softened.

Export volumes of meat and cereal grains increased.

The balance on goods and services surplus increased by half a billion, widening the surplus to $8.9 billion, with an expected contribution of 0.1 percentage points to growth in the December quarter.

BIS Oxford Economics chief economist Sarah Hunter says the results confirmed general trends seen in 2019, with exports were broadly flat as sharp falls in the volatile net exports of goods and non-monetary gold offset gains in rural and non-rural goods.

Services exports were also largely flat as gains in transport and travel offset falls in other services, Dr Hunter said.

Tourism-related services grew by two per cent, suggesting the bushfires in NSW at the end of the year had a limited impact on demand, she said.

“We expect to see a sharp fall back in the current quarter, when the full impact of the fires and the COVID-19 will be seen in the data,” she said.

“Put together with the capex survey released last week and the retail turnover figures, we expect the national accounts data to report an expansion of around 0.4 per cent for the December quarter.”

She expects the next data will report that growth momentum ground to a halt in the first quarter of 2020.


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