AUSTRALIA DATA
Q2’s current account deficit widened significantly more than expected at $10.7bn compared with $6.3bn in Q1, which was revised up. The net export contribution to GDP was 0.4pp lower than expected at 0.2pp after a 0.9pp detraction in Q1. Government finance statistics showed that public demand contributed 0.4pp to Q2 growth after 0.2pp. GDP prints on Wednesday.
- Q2’s current account deficit was the largest in six years driven by a $5bn narrowing in the merchandise trade surplus, impacted by lower commodity prices, and a widening in the primary income deficit. The services deficit narrowed $1bn.
Australia current account $bn
Source: MNI - Market News/ABS
- The terms of trade fell 3.1% q/q and 3.9% y/y, as export prices fell 3% q/q and imports were unchanged.
- The volume of goods and services exports rose 0.5% q/q and 0.1% y/y in Q2, down from 3.3% y/y, with the increase driven by services (+5.6% q/q) while merchandise fell (-0.5% q/q). Import volumes declined 0.2% q/q to be up 5.2% y/y with the weakness concentrated in goods.
- Goods exports fell 4.4% q/q with both rural and non-rural weaker. Softer prices for iron ore and coal fell for a second consecutive quarter driving the 5.3% q/q & 8% y/y drop in non-rural shipments. Services rose 6% q/q though to be up 11.9% y/y, boosted by the education sector.
- Merchandise imports fell 0.6% q/q with the weakness in mining capex goods, consistent with recent soft investment data. Consumer goods rose 1% q/q after 8.9% in Q1 to be up 5.1% y/y. Services imports rose 1.1% q/q and slowed to 6% y/y.
Australia goods & services trade volumes y/y%
Source: MNI - Market News/ABS
273 words