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Balance of Payments and International Investment Position, Australia

Balance of payments on capital and financial transactions plus an international investment statement detailing level of investment and income

Reference period
March Quarter 2020

Key statistics

  • Australia's net IIP liability position decreased $101.4b.
  • Australia's net foreign debt liability position increased $3.8b.
  • Australia's net foreign equity asset position increased $105.3b.
  • The balance on goods and services surplus rose $5,628m.

Main features

Suspension of trend estimates

  • Due to the impact of COVID-19 trend estimates have been suspended in this publication from June quarter 2019.
     

Balance of payments

  • The current account surplus, seasonally adjusted, rose $6,673m to $8,395m in the March quarter 2020, as COVID-19 effects impacted international trade. The balance on goods and services surplus rose $5,628m to $19,188m. The primary income deficit fell $822m to $10,612m.
  • In seasonally adjusted chain volume terms, the surplus on goods and services rose $2,292m from $8,628m in the December quarter 2019 to $10,920m in the March quarter 2020. This is expected to contribute 0.5 percentage points to growth in the March quarter 2020 volume measure of GDP.
     

International investment position (IIP)

  • Australia's net IIP liability position was $808.1b at 31 March 2020, a decrease of $101.4b on the revised 31 December 2019 position of $909.5b. Australia's net foreign debt liability position increased $3.8b to $1,146.3b. Australia's net foreign equity asset position increased $105.3b to $338.3b at 31 March 2020.
     
 Dec Qtr 2019Mar Qtr 2020Dec Qtr 2019 to Mar Qtr 2020
$m$m% change
BALANCE ON CURRENT ACCOUNT   
 Trend estimates (a)
na
na
na
 Seasonally adjusted
1 722
8 395
388
BALANCE ON GOODS AND SERVICES   
 Trend estimates (a)
na
na
na
 Seasonally adjusted
13 560
19 188
42
NET PRIMARY INCOME   
 Trend estimates (a)
na
na
na
 Seasonally adjusted
-11 434
-10 612
7
LEVELS AT END OF PERIOD   
 International Investment Position
909 509
808 078
-11
  Net foreign equity
-233 010
-338 262
-45
  Net foreign debt
1 142 519
1 146 339
-
na not available
a. Trend Series is not published from June Quarter 2019
 
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  1. Seasonally adjusted estimates at current prices.
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Suspension of trend estimates

The trend series attempts to measure underlying behaviour of economic activity. In the short term, this measurement will be significantly affected by the current COVID-19 pandemic and subsequent changes to regular patterns in behaviour that will occur during this time. If the trend estimates in this publication were to be calculated without fully accounting for this unusual event, they would provide a misleading view of underlying activity within the balance of payments.

It may be some time before the underlying trend in the balance of payments can be accurately estimated. The trend series has therefore been suspended from June quarter 2019 and will be reinstated when more certainty emerges in the underlying trend.

Seasonally adjusted estimates

International Accounts uses the concurrent seasonal adjustment method, meaning that seasonal factors are re-estimated each time a new data point becomes available. If not appropriately accounted for, unusual real-world events, such as COVID-19, can distort estimates calculated using this method. From March quarter 2020, seasonal factors that have been notably impacted by these events will be calculated using data up to and including December quarter 2019, then projected from March quarter 2020 onwards. This approach, known as the forward factor method, ensures that the seasonal factors are not distorted by COVID-19 impacts.

International student numbers in March quarter

Estimates of travel services credits, which includes expenditure by international students/visitors in Australia, fell 19.2% in the March quarter 2020. The potential impact of international travel restrictions on the travel service credits have been reduced as approximately 80% of international students were in Australia at the time restrictions took effect. This data is sourced from the Department of Home Affairs' numbers of student visa holders in Australia (https://www.data.gov.au).

COVID-19 and bushfires in March quarter

Quality assurance undertaken by the ABS confirmed that the COVID-19 pandemic and bushfires did not result in quality impacts to Balance of Payments and International Investment Position statistics for March quarter 2020. For information on the expected economic impacts of COVID-19 and the bushfires, please see the ABS Chief Economist Series paper Measuring natural disasters in the Australian economy.

Analysis and comments

Balance of payments

In original current price terms, the March quarter 2020 current account surplus was $9,249m, a rise of $7,079m on the December quarter 2019 surplus. In original current price terms, the balance on goods and services was a surplus of $20,835m, primary income was a deficit of $11,183m and secondary income was a deficit of $403m.

In original current price terms, the March quarter 2020 capital and financial account deficit was $11,599m, a rise of $10,432m on the December quarter 2019 deficit. In original current price terms, the capital account was a deficit of $186m and the financial account was a deficit of $11,413m.

The contributors to the current account balances, in original terms at current prices, are shown in the following table.

Balance of payments, summary(a): original

 Mar 2019Jun 2019Sep 2019Dec 2019Mar 2020
$m$m$m$m$m
CURRENT ACCOUNT
-1 142
6 331
3 862
2 170
9 249
 Goods and services
16 295
19 212
18 646
13 113
20 835
  Credits
117 035
123 603
127 596
124 342
116 930
  Debits
-100 740
-104 391
-108 950
-111 229
-96 095
   Goods
13 800
21 522
20 646
12 729
18 148
    Credits
90 366
100 443
102 328
97 333
91 992
    Debits
-76 566
-78 921
-81 682
-84 604
-73 844
   Services
2 495
-2 310
-2 000
384
2 687
    Credits
26 669
23 160
25 268
27 009
24 938
    Debits
-24 174
-25 470
-27 268
-26 625
-22 251
 Primary income
-16 736
-12 716
-14 627
-10 921
-11 183
  Credits
18 184
17 784
17 218
18 444
17 928
  Debits
-34 920
-30 500
-31 846
-29 365
-29 111
 Secondary income
-701
-165
-157
-22
-403
  Credits
2 462
2 559
2 517
2 513
2 505
  Debits
-3 163
-2 724
-2 674
-2 535
-2 908
CAPITAL AND FINANCIAL ACCOUNT
2 015
-4 149
-5 256
-1 167
-11 599
 Capital account
-200
-233
-189
-174
-186
  Acquisitions/disposals of non-produced non-financial assets
3
2
-24
6
2
   Credits
3
2
-
7
3
   Debits
-
-
-24
-1
-1
  Capital transfers
-203
-235
-165
-180
-188
   Credits
-
-
-
-
-
   Debits
-203
-235
-165
-180
-188
 Financial account
2 215
-3 916
-5 067
-993
-11 413
  Direct investment
4 555
26 557
17 570
-1 124
6 104
   Assets
-7 054
1 700
5 360
-9 945
-3 048
   Liabilities
11 609
24 857
12 210
8 821
9 153
  Portfolio investment
-23 963
-38 744
-7 018
19 210
-27 432
   Assets
-15 145
-27 598
-26 878
-17 819
16 900
   Liabilities
-8 819
-11 146
19 860
37 029
-44 333
  Financial derivatives
-744
-2 369
2 006
-4 874
535
   Assets
18 255
15 934
27 393
38 148
13 371
   Liabilities
-18 999
-18 303
-25 387
-43 022
-12 836
  Other investment
24 213
7 648
-21 163
-5 094
8 421
   Assets
17 477
-4 978
-22 580
4 149
-69 282
   Liabilities
6 736
12 626
1 418
-9 243
77 702
  Reserve assets
-1 846
2 992
3 538
-9 111
959
NET ERRORS AND OMISSIONS
-873
-2 182
1 394
-1 004
2 350
- nil or rounded to zero (including null cells)
a. For sign conventions, see the Concepts section of the Explanatory notes on the Methodology page.
 

In seasonally adjusted current price terms, the March quarter 2020 current account surplus was $8,395m, a rise of $6,673m on the December quarter 2019 surplus.

The contributors to the current account balance, in seasonally adjusted terms at current prices, are shown in the following table.

Balance on current account in current prices - March quarter 2020

 Current pricesCurrent prices changeCurrent prices
$m$m%
Seasonally Adjusted
Balance on current account
8 395
6 673
388
 Balance on goods and services
19 188
5 628
42
  Net goods
19 302
5 875
44
  Net services
-114
-247
-186
 Net primary income
-10 612
822
7
 Net secondary income
-181
223
55
Trend (a)
Balance on current account
na
na
na
 Balance on goods and services
na
na
na
  Net goods
na
na
na
  Net services
na
na
na
 Net primary income
na
na
na
 Net secondary income
na
na
na
na not available
a. Trend Series is not published from June Quarter 2019
 

Terms of trade (footnote 1)

Australia's seasonally adjusted terms of trade on net goods and services for the March quarter 2020 rose 2.9% to 106.5, with an increase of 2.4% in the implicit price deflator (IPD) for goods and services credits and a decrease of 0.5% in the IPD for goods and services debits.

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  1. Seasonally adjusted, reference year 2017-18 = 100.
     

Balance on goods and services

In seasonally adjusted chain volume terms, the balance on goods and services was a surplus of $10,920m, a rise of $2,292m on the December quarter 2019 surplus of $8,628m.

The surplus on goods rose $2,358m on the December quarter 2019 surplus of $6,595m. Goods credits fell $533m (1%) and goods debits fell $2,891m (4%). The surplus on services fell $66m on the December quarter 2019 surplus of $2,032m.

The rise in the balance on goods and services surplus, in seasonally adjusted chain volume terms, is expected to contribute 0.5 percentage points to growth in the March quarter 2020 chain volume measure of GDP, assuming no significant revision to the GDP chain volume estimate for the December quarter 2019.

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  1. Seasonally adjusted, reference year 2017-18
     

Goods

In seasonally adjusted terms at current prices, net goods was a surplus of $19,302m, a rise of $5,875m on the December quarter 2019 surplus of $13,427m.

Goods, price and volume analysis: seasonally adjusted - March quarter 2020

  Change in:
Current pricesCurrent pricesChain volume measures(a)Implicit price deflators(a)(b)
$m%%%
Exports
1 774
1.9
-0.7
2.6
Rural goods
134
1.1
-1.5
2.6
Non-rural goods
1 660
2.2
0.2
2.0
Net exports of goods under merchanting
-32
-36.8
-38.2
2.3
Non-monetary gold
12
0.2
-10.0
11.4
Imports
-4 101
-5.1
-3.9
-1.2
Consumption goods
-764
-2.9
-2.1
-0.8
Capital goods
-1 938
-10.0
-10.3
0.4
Intermediate and other merchandise goods
-2 243
-6.7
-3.2
-3.6
Non-monetary gold
844
63.6
47.1
11.2
- nil or rounded to zero (including null cells)
a. Reference year 2017-18.
b. Movements in indexes are based on data to four decimal places.
 

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Goods credits

In seasonally adjusted terms at current prices, goods credits rose $1,774m (2%) to $96,177m, with volumes down 1% and prices up 3%.

Rural goods

Exports of rural goods, in seasonally adjusted terms at current prices, rose $134m (1%) to $12,254m, with volumes down 1% and prices up 3%.

The main components contributing to the rise were:

  • wool and sheepskins, up $56m (8%), with volumes up 6% and prices up 2%
  • other rural, up $32m (1%), with volumes down 2% and prices up 2%
  • meat and meat preparations, up $25m (1%), with volumes down 3% and prices up 4%
  • cereal grains and cereal preparations, up $20m (1%), with volumes down 1% and prices up 2%.
     

Non-rural goods

Exports of non-rural goods, in seasonally adjusted terms at current prices, rose $1,660m (2%) to $77,762m, with prices up 2%.

The main components contributing to the rise were:

  • other mineral fuels, up $890m (6%), with volumes up 3% and prices up 3%
  • metal ores and minerals, up $446m (1%), with volumes down 2% and prices up 3%
  • metals (excl. non-monetary gold), up $208m (7%), with volumes up 10% and prices down 3%
  • coal, coke and briquettes, up $184m (1%), with volumes up 1% and prices up 1%.
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  1. Seasonally adjusted.
     

Net exports of goods under merchanting

Net exports of goods under merchanting, in seasonally adjusted terms at current prices, fell $32m (37%) to $55m, with volumes down 38% and prices up 2%.

Non-monetary gold

Exports of non-monetary gold, in original and seasonally adjusted terms at current prices, rose $12m to $6,106m, with volumes down 10% and prices up 11%.

Goods debits

In seasonally adjusted terms at current prices, goods debits fell $4,101m (5%) to $76,875m, with volumes down 4% and prices down 1%.

Consumption goods

Imports of consumption goods, in seasonally adjusted terms at current prices, fell $764m (3%) to $25,771m, with volumes down 2% and prices down 1%.

The main components contributing to the fall were:

  • consumption goods n.e.s., down $497m (6%), with volumes down 3% and prices down 3%
  • textiles, clothing and footwear, down $321m (7%), with volumes down 7%
  • household electrical items, down $111m (7%), with volumes down 8% and prices up 1%.
     

Partly offsetting these falls was non-industrial transport equipment, up $231m (4%), with volumes up 5% and prices down 1%.

Capital goods

Imports of capital goods, in seasonally adjusted terms at current prices, fell $1,938m (10%) to $17,536m, with volumes down 10%.

The main components contributing to the fall were:

  • capital goods n.e.s., down $640m (20%), with volumes down 18% and prices down 2%
  • machinery and industrial equipment, down $455m (7%), with volumes down 8% and prices up 1%
  • ADP equipment, down $442m (15%), with volumes down 17% and prices up 2%
  • civil aircraft and confidentialised items, down $296m (24%), with volumes down 25% and prices up 1%
     

Intermediate and other merchandise goods

Imports of intermediate and other merchandise goods, in seasonally adjusted terms at current prices, fell $2,243m (7%) to $31,396m, with volumes down 3% and prices down 4%.

The main components contributing to the fall were:

  • fuels and lubricants, down $1,453m (14%), with volumes down 5% and prices down 10%
  • other parts for capital goods, down $347m (7%), with volumes down 8% and prices up 1%
  • parts for transport equipment, down $247m (7%), with volumes down 7%
  • processed industrial supplies n.e.s., down $145m (2%), with volumes down 1% and prices down 1%.
     

Non-monetary gold

Imports of non-monetary gold, in original and seasonally adjusted terms at current prices, rose $844m (64%) to $2,171m, with volumes up 47% and prices up 11%.

Services

In seasonally adjusted terms at current prices, net services was a deficit of $114m, a turnaround of $247m on the December quarter 2019 surplus.

Services, price and volume analysis: seasonally adjusted - March quarter 2020

  Change in:
Current pricesCurrent pricesChain volume measures(a)Implicit price deflators(a)(b)
$m%%%
Exports
-3 268
-12.4
-12.8
0.4
Manufacturing services on physical inputs owned by others
-
-
-
-
Maintenance and repair services n.i.e.
-7
-46.7
-46.7
0.1
Transport
-175
-8.8
-8.4
-0.5
Travel
-3 251
-19.2
-19.9
0.8
Other services
166
2.2
2.0
0.2
Imports
3 021
11.5
13.6
2.4
Manufacturing services on physical inputs owned by others
-
-
-
-
Maintenance and repair services n.i.e.
40
15.0
18.1
3.7
Transport
431
9.1
7.2
-2.0
Travel
2 681
20.3
22.8
3.2
Other services
-131
-1.6
2.0
3.7
- nil or rounded to zero (including null cells)
a. Reference year 2017-18.
b. Movements in indexes are based on data to four decimal places.
 

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Services credits

Services credits, in seasonally adjusted terms at current prices, fell $3,268m (12%) to $23,081m, with volumes down 13%.

The main components contributing to the fall were:

  • travel, down $3,251m (19%), with volumes down 20% and prices up 1%
  • transport, down $175m (9%), with volumes down 8%.
     

Partly offsetting these falls was other services, up $166m (2%), with volumes up 2%.

In seasonally adjusted terms, tourism related services credits fell $3,474m (20%) to $14,233m.

Services debits

Services debits, in seasonally adjusted terms at current prices, fell $3,021m (12%) to $23,195m, with volumes down 14% and prices up 2%.

The main components contributing to the fall were:

  • travel, down $2,681m (20%), with volumes down 23% and prices up 3%
  • transport, down $431m (9%), with volumes down 7% and prices down 2%.
     

In seasonally adjusted terms, tourism related services debits fell $3,061m (20%) to $12,093m.

Primary income

In seasonally adjusted terms at current prices, the net primary income deficit fell $822m (7%) to $10,612m in the March quarter 2020.

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Primary income credits

Primary income credits, in seasonally adjusted terms at current prices, rose $172m (1%) to $18,178m

The main components contributing to the rise were:

  • investment income, direct investment assets, income on equity and investment fund shares, up $208m (3%)
  • investment income, other investment assets, up $100m (8%).
     

Partly offsetting these rises was investment income, portfolio investment assets, interest, down $124m (8%). 

Primary income debits

Primary income debits, in seasonally adjusted terms at current prices, fell $650m (2%) to $28,791m.

The main components contributing to the fall were:

  • compensation of employees, down $515m (22%)
  • investment income, direct investment liabilities, income on equity and investment fund share, down $199m (2%).
     

Partly offsetting this fall was investment income, portfolio investment liabilities, income on equity and investment fund shares, up $88m (1%).

Secondary income

In seasonally adjusted terms at current prices, the net secondary income deficit fell $223m to $181m in the March quarter 2020.

Capital account

In original terms, the capital account deficit was $186m, an increase of $12m on the December quarter 2019 deficit of $174m. Capital account credits decreased $4m (57%) and capital account debits increased $8m (4%) in the March quarter 2020.

Financial account

The balance on the financial account, in original terms, recorded a net outflow of $11.4b, which was driven by a net inflow of equity of $33.5b and a net outflow of debt of $44.9b.

The financial account deficit increased $10.4b from $1.0b in the December quarter 2019, to $11.4b in the March quarter 2020.

Direct investment

Direct investment recorded a net inflow of $6.1b in the March quarter 2020, a turnaround of $7.2b on the net outflow of $1.1b in the December quarter 2019, where:

  • direct investment liabilities recorded an inflow of $9.2b, an increase of $0.3b on the inflow of $8.8b in the December quarter 2019
  • direct investment assets recorded an outflow of $3.0b, a decrease of $6.9b on the outflow of $9.9b in the December quarter 2019.
     

Portfolio investment

Portfolio investment recorded a net outflow of $27.4b in the March quarter 2020, a turnaround of $46.6b on the net inflow of $19.2b in the December quarter 2019, where:

  • equity and investment fund shares recorded a net inflow of $29.3b in the March quarter 2020, a turnaround of $41.8b on the net outflow of $12.6b in the December quarter 2019
  • debt securities recorded a net outflow of $56.7b in the March quarter 2020, a turnaround of $88.5b on the net inflow of $31.8b in the December quarter 2019.
     

Financial derivatives

Financial derivatives recorded a net inflow of $0.5b in the March quarter 2020, a turnaround of $5.4b on the net outflow of $4.9b in the December quarter 2019.

Other investment

Other investment recorded a net inflow of $8.4b in the March quarter 2020, a turnaround of $13.5b on the net outflow of $5.1b in the December quarter 2019.

Reserve assets

Reserve assets recorded an inflow of $1.0b in the March quarter 2020, a turnaround of $10.1b on the outflow of $9.1b in the December quarter 2019.

International investment position (IIP)

Australia's net IIP liability position was $808.1b at 31 March 2020, a decrease of $101.4b on the revised 31 December 2019 position of $909.5b. Australia's net foreign debt liability position increased $3.8b to $1,146.3b. Australia's net foreign equity asset position increased $105.3b to $338.3b at 31 March 2020.

International investment position, by net foreign equity and net foreign debt

  Changes in position reflecting 
Position at beginning of periodTransactionsPrice changesExchange rate changesOther adjustmentsPosition at end of period
$m$m$m$m$m$m
Net International Investment Position      
 Sep 2019
1 006 032
-5 067
951
-4 956
-11 067
985 892
 Dec 2019
985 892
-993
-85 921
13 445
-2 915
909 509
 Mar 2020
909 509
-11 413
-22 807
-62 666
-4 545
808 078
Net Foreign Equity     
 Sep 2019
-136 065
251
-6 143
-19 426
-14 227
-175 611
 Dec 2019
-175 611
-6 312
-73 279
27 327
-5 135
-233 010
 Mar 2020
-233 010
33 474
-8 343
-123 942
-6 440
-338 262
Net Foreign Debt     
 Sep 2019
1 142 097
-5 318
7 095
14 470
3 160
1 161 503
 Dec 2019
1 161 503
5 319
-12 642
-13 882
2 221
1 142 519
 Mar 2020
1 142 519
-44 887
-14 464
61 276
1 895
1 146 339

Supplementary information

Conditions

The conditions in the global economy showed a decline in growth in all of Australia’s major trading partner countries in the March quarter 2020. According to the Organisation for Economic Cooperation and Development (OECD) (footnote 2) preliminary growth rates compared to last quarter in seasonally adjusted terms showed quarterly growth for China (-9.8%), France (-5.8%), Spain (-5.2%), Belgium (-3.9%), EU 27 (-3.3%), Germany (-2.2%), UK (-2.0%), Netherlands (-1.7%), South Korea (-1.4%), USA (-1.2%), Japan (-0.9%), and Indonesia (-0.7%).

  • Foreign asset transactions recorded an outflow of $41.1b in the March quarter 2020 compared to an inflow of $5.4b in the December quarter 2019
  • Foreign liability transactions recorded an inflow of $29.7b in the March quarter 2020 compared to an outflow of $6.4b in the December quarter 2019.
     

The Australian share market, as measured by the MSCI global index (footnote 3), decreased 24.3% in the March quarter 2020, compared to a decrease of 0.7% in the December quarter 2019. Decreases were recorded in France (26.1%), Germany (25.5%), UK (24.9%), Singapore (24.1%), Canada (21.0%), the USA (20.0%), Japan (18.2%), Hong Kong (18.2%), Switzerland (12.4%), China (10.3%) and New Zealand (5.5%). A market price change of $232.2b was recorded for foreign equity assets and -$240.5b for foreign equity liabilities in the March quarter 2020.

According to Thomson Reuters (footnote 4), the composite corporate benchmark yields increased in the USA from 2.94% to 3.77%, the UK from 1.99% to 2.49%, Germany from 0.63% to 1.78%, and Japan from 0.41% to 0.48% over the March quarter 2020. The long-term 10 year government bond yields decreased in the USA from 1.92% to 0.70%, Australia from 1.20% to 0.89%, the UK from 0.82% to 0.36%, Germany from -0.19% to -0.46% over the March quarter 2020. Whereas the long-term 10 year government bond yield increased in Japan from -0.02% to 0.02% over the March quarter 2020. A market price change of $4.5b was recorded for portfolio investment debt securities assets and $10.4b in portfolio investment debt securities liabilities in the March quarter 2020.

The Australian dollar depreciated against almost all major and minor trading currencies in the March quarter 2020. The Australian dollar depreciated 12.22% against the Japanese yen, 12.21% against the Hong Kong dollar, 11.86% against the US dollar, 10.45% against the Chinese renminbi, 10.38% against the European euro, 6.25% against the UK pound sterling, 4.12% against the Canadian dollar and 1.49% against the New Zealand dollar. The Australian dollar appreciated 3.90% against the Indonesian rupiah. The Trade Weighted Index (TWI) (footnote 5) fell 9.29% to 54.700 in the March quarter 2020. These movements were reflected in exchange rate changes for foreign assets of -$208.3b and foreign liabilities of $145.6b in the March quarter 2020.

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Relationship between IPD, EPI and IPI (footnote 6)

In original terms, the IPD for total goods credits rose 2.5% and the chain Laspeyres price index for goods exports rose 2.7%. The Export Price Index (EPI)(footnote 7) rose 2.7% during the March quarter 2020.

In original terms, the IPD for total goods debits fell 1.2% and the chain Laspeyres price index for goods imports fell 1.0%. The Import Price Index (IPI)(footnote 7) fell 1.0% during the March quarter 2020.

Differences between the IPD and International Trade Price Indexes can arise due to a number of methodological factors including differences in pricing points, timing, coverage and weights.

Goods and services, price comparison - March quarter 2020

  Change in:
Seasonally adjustedOriginal
Implicit price deflators(a)Implicit price deflators(a)International trade price indexes(b)Chain Laspeyres price indexes(a)
%%%%
Exports    
 Goods
2.6
2.5
2.7
2.7
 Services
0.4
0.5
na
0.6
Imports    
 Goods
-1.2
-1.2
-1.0
-1.0
 Services
2.4
2.4
na
2.4
na not available
a. Reference year 2017-18 = 100.
b. Source: International Trade Price Indexes, Australia (cat. no. 6457.0).
 
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  1. Reference year 2017-18 =100.
  2. Source: International Trade Price Indexes, Australia (cat. no. 6457.0).
     

Commodity price indexes

The RBA Commodity Price Index (average monthly index) for rural commodities rose 2.3% between the December quarter 2019 and the March quarter 2020 while the EPI for rural goods rose 3.0%.

The RBA Commodity Price Index for non-rural commodities rose 3.1% between the December quarter 2019 and the March quarter 2020 while the EPI for non-rural goods (excluding non-monetary gold) rose 1.8%.

Differences between the RBA Commodity Price Index and ABS price measures are largely a consequence of methodological differences used in the construction of the respective indexes, including coverage of included commodities and timing of source data.

Footnotes

  1. In this commentary movements in indexes are based on data to four decimal places.
  2. OECD Statistics Quarterly National Account, Organisation for Economic Cooperation and Development – Economic Department, viewed 25 May 2020.
  3. MSCI Global Market Indexes 2019, Morgan Stanley Capital International, viewed 13 April 2020. 
  4. Thomson Reuters, viewed 09 April 2020. 
  5. Exchange Rates – Daily 2014 to Current, Reserve Bank of Australia - Statistical Tables, viewed 10 April 2020.
  6. In this commentary movements in indexes are based on data to four decimal places.
  7. Source: International Trade Price Indexes, Australia (cat. no. 6457.0).

Revisions

The following goods component has been revised since the release of the March 2020 issue of International Trade in Goods and Services, Australia (cat. no. 5368.0).

  • capital goods n.e.s. component of goods debits, revised in the March quarter 2020.
     

Summary of revisions since the last issue of this publication

Table 28 summarises revisions, in original current price terms, since the last issue of this publication.

Incorporation of the latest survey and administrative data has resulted in revisions to the balance of payments series back to the September quarter 2018. In original current price terms, these revisions have:

  • decreased the current account deficit for September quarter 2018 by $137m
  • decreased the current account deficit for December quarter 2018 by $82m
  • increased the current account deficit for March quarter 2019 by $56m
  • increased the current account surplus for June quarter 2019 by $36m
  • increased the current account surplus for September quarter 2019 by $614m
  • increased the current account surplus for December quarter 2019 by $325m.
     

The International Investment Position (IIP) has been revised back to the September quarter 2018. These revisions have increased Australia's net IIP liability $18,027m to a net liability position of $909,509m at 31 December 2019.

The financial account deficit has been revised down $661m to $993m at 31 December 2019.

Seasonally adjusted and trend series have been revised due to the incorporation of revised estimates and the incorporation of estimates for the latest quarter.

In seasonally adjusted terms, the revisions decreased the volume surplus on goods and services by $798m for the December quarter 2019.

Data in this issue aligns with the data in the March quarter 2020 issue of Australian National Accounts: National Income, Expenditure and Product (cat. no. 5206.0) to be released on 3 June 2020.

Changes in this and forthcoming issues

Suspension of trend estimates

The trend series attempts to measure underlying behaviour of economic activity. In the short term, this measurement will be significantly affected by the current COVID-19 pandemic and subsequent changes to regular patterns in behaviour that will occur during this time. If the trend estimates in this publication were to be calculated without fully accounting for this unusual event, they would provide a misleading view of underlying activity within the balance of payments.

It may be some time before the underlying trend in the balance of payments can be accurately estimated. The trend series has therefore been suspended from June quarter 2019 and will be reinstated when more certainty emerges in the underlying trend.

Seasonally adjusted estimates

International Accounts uses the concurrent seasonal adjustment method, meaning that seasonal factors are re-estimated each time a new data point becomes available. If not appropriately accounted for, unusual real-world events, such as COVID-19, can distort estimates calculated using this method. From March quarter 2020, seasonal factors that have been notably impacted by these events will be calculated using data up to and including December quarter 2019, then projected from March quarter 2020 onwards. This approach, known as the forward factor method, ensures that the seasonal factors are not distorted by COVID-19 impacts.

Value adjustments

Goods credits data presented in this publication are based on information provided by exporters to the Department of Home Affairs (Home Affairs). At the time of initial reporting to Home Affairs, the final prices at which transactions take place are not known for some commodities. Final quantity and/or unit price information is updated progressively in international merchandise trade data as exporters revise the information provided to Home Affairs.

For commodities such as iron ore and coal, newly negotiated contract prices are not fully reflected in data first reported to Home Affairs. When additional information on quantity and/or unit price for these commodities is available, the ABS may adjust the data to reflect actual transaction values.

Iron ore adjustments are applied on an international merchandise trade basis at the Australian Harmonized Export Commodity Classification (AHECC) level. Coal, coke and briquettes are adjusted on a balance of payments basis in original current price terms. When actual final transaction prices become available estimates are replaced with these data.

In most instances, transfer of ownership occurs when goods cross the customs frontier. In certain circumstances the ownership of large value capital expenditure items can occur prior to the items crossing the customs frontier. The ABS may adjust the relevant balance of payments series to record the timing when transfer of ownership was effected.

    Exports on an international merchandise trade basis

    Iron ore (in original terms)

    • adjustments have been applied to iron ore lump in the September quarter (+$15m), the December quarter (+$90m) 2019 and the March quarter (-$15m) 2020. Adjustments have been applied to iron ore fines in the September quarter (+$5m), the December quarter (+$100m) 2019 and the March quarter (-$290m) 2020, When actual final transaction prices become available estimates are replaced with these data.
       

    Goods credits on a balance of payments basis

    Coal (in original terms)

    • adjustments have been applied to coal, coke and briquettes in the balance of payments series for the March quarter (-$695m) 2020. All previous adjustments have been removed.
       

    Capital expenditure (in original terms)

    • the balance of payments goods debits component capital goods n.e.s. includes an estimate of expenditure on capital goods that have changed ownership but have not yet crossed the customs frontier.

    Related releases

    International investment position, Australia: supplementary statistics

    The publication International Investment Position, Australia: Supplementary Statistics, 2019 (cat. no. 5352.0) was released on the ABS website on 7 May 2020.

    Data downloads

    All time series spreadsheets

    Table 1. Balance of payments, summary: original - quarter

    Table 2. International investment position: by net foreign equity and net foreign debt - quarter

    Table 3. Foreign assets and liabilities: by equity and debt - quarter

    Table 4. Current account transactions: seasonally adjusted and trend estimates - quarter

    Table 5. Goods and services: chain volume measures and indexes - quarter

    Table 6. Goods credits

    Table 7. Goods debits

    Table 8. Services credits

    Table 9. Services debits

    Table 10. Income credits - quarter

    Table 11. Income debits - quarter

    Table 12. Capital account: original - quarter

    Table 13. Financial account - quarter

    Table 14. International investment: foreign assets - quarter

    Table 15. International investment: foreign liabilities - quarter

    Table 16. Foreign debt levels - quarter

    Table 17. Gross external debt liabilities: levels - quarter

    Table 18. Currency and residual maturity of foreign debt - quarter

    Table 19. Exchange rates - quarter

    Table 20. Foreign assets and liabilities by industry - quarter

    Table 21. Goods and services credit by state on a balance of payments basis - quarter

    Table 22. Goods and services debits by state on a balance of payments basis - quarter

    Table 23. Selected international accounts ratios: seasonally adjusted - quarter

    Table 24. Quarterly combined current price seasonal adjusted factors

    Table 25. Exports by SITC division on a balance of payments basis - quarter

    Table 26. Imports by broad economic category on a balance of payments basis - quarter

    Table 27. International investment: directional principle - quarter

    Table 28. Summary of revisions - quarter

    Table 29. International investment position: historical summary - quarter

    Table 30. Balance of payments, summary: original - financial year

    Table 31. Selected services, chain volume measures and implicit price deflators: original - quarter