Trial now

Limited Start


Japan To Observe Holiday


Flattening Extends

--Current Accounts Deficit Widens in Q2
     SYDNEY (MNI)- From Balance of Payments data for the second quarter
published by the Australian Bureau of Statistics on Tuesday:
                                                 Q2                           Q1
                                         In A$, Bln                   In A$, Bln
Current Acct Balance                           -9.6     -4.8 (revised from -3.1)
                               -7.9 (Range -12.0 to
MNI Median                                    -4.5)
Net Export Contribution to                             -0.7 pct points (revision
GDP                                 +0.3 pct points                         N/A)
MNI Median                  0.0(Range -0.4 to +0.2)
Terms of Trade                                -6.0%         +6.6% (revision N/A)
     FACTORS: The current-account deficit widened in Q2 due mainly to a
narrowing in the goods and services surplus owing to lower export commodity
prices. Exports of goods and services fell A$2.7 billion (-3%) and imports of
goods and services rose A$1.6 billion (+2%). The primary income deficit widened
by A$499 million. 
     In seasonally adjusted chain-volume terms, the deficit on goods and
services shrank from A$1.6 billion in Q1 to A$196 million in Q2 and so is
expected to add 0.3 percentage point to the Q2 volume measure of gross domestic
product. However, the narrowing in deficit was due to a sharp revision in Q1
balance from a surplus position of A$543 million to deficit of A$1.6 billion.
     Australia's terms of trade fell 6.0% in Q2 owing to an decrease of 5.4% in
the implicit price deflator for goods and services credits and an increase of
0.7% in the deflator for goods and services debits.
     Data on government finances showed total general government final
consumption expenditure increased A$946 million or 1.2% q/q.  Total general
government gross fixed capital formation increased by A$3.0 billion - up 19.7%
q/q. Total public corporations gross fixed capital formation fell by A$481
million - a decline of 8.1% q/q.
     TAKEAWAY: The net export contribution to Q2 GDP was better than MNI median
forecast for zero contribution. However, this was due to a sharp downward
revision in Q1 data which may lead to downward revision to the contribution of
net exports to Q1 GDP from the 0.7 subtraction originally reported. Economists
will finalize forecasts for Q2 GDP, which will be released Wednesday morning,
after this data and after taking into account government finance statistics.
     The current MNI survey median forecast for Q2 GDP is +0.8% q/q and +1.8%
y/y with downward bias. Even if there is no revision to the +0.8% q/q GDP
forecast, it is likely the +1.8% y/y projection will be revised downwards.
--MNI Sydney Bureau; tel: +61 2-9716-5467; email: