MNI 5 Things:Upside GDP Risk Fm Australia Net Export,Govt Expn

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By Sophia Rodrigues

     SYDNEY (MNI) - Following are the five key observations we made from Balance

of Payments and Government Finance Statistics data for the fourth quarter

published by the Australian Bureau of Statistics Tuesday:

     --Both data overall pose some upside risk to Q4 GDP forecast. Current MNI

median forecast stands at 0.5% q/q growth and 2.5% y/y.

     --Net Export to detract 0.5 percentage points from Q4 GDP. This is slightly

better than MNI median forecast for a detraction of 0.6 points.

     --Terms of trade rose 0.1% q/q. While there was no median forecast for this

data, the expectation was for a small fall. The outcome is therefore slightly

better than expected and the rise follows two quarters of fall. The small rise

in terms of trade was due to an increase of 1.6% in the implicit price deflator

(IPD) for goods and services credits and an increase of 1.5% in the IPD for

goods and services debits.

     --Current Account deficit widened to A$14.0 billion in Q4 compared with a

deficit of A$11.0 billion in Q3. The deficit was wider than MNI median forecast

for A$12.3 billion and outside the range forecast by economists in the poll. The

wider deficit was due to a turnaround of A$2.01 billion on the balance of goods

and services, and a rise in primary income deficit of A$899 million.

     --Data on government finances showed total general government final

consumption expenditure is expected to add 0.3 percentage points to Q4 GDP and

public gross fixed capital formation is expected to add 0.2 percentage points.

Both outcomes are better than Q3 when government final consumption made no

contribution to GDP and public gross fixed capital formation detracted 0.4

percentage points.

     --Net purchases of second-hand assets by the public sector was A$1.2

billion in Q4 which will reduce private gross fixed capital formation.

--MNI Sydney Bureau; tel: +61 2-9716-5467; email: sophia.rodrigues@marketnews.com

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