Today's Balance of Payments figures show the continuing effects of the global recession, with record falls in export prices over the past year impacting heavily on the Australian economy.
Export prices fell by a further 1.8 per cent in the September quarter, taking the fall over the past year to 19.5 per cent. This is the largest through-the-year fall in export prices in the history of the series dating back to 1959, reflecting the dramatic impacts of the global recession.
The current account deficit widened to $16.2 billion in the September quarter (representing 5.5 per cent of June quarter GDP). This was driven by an increase in the trade deficit, offset in part by a narrowing of the net income deficit.
The terms of trade rose by 1.0 per cent in the quarter, with a fall in import prices of 2.8 per cent exceeding the fall in export prices. The terms of trade remain 15.9 per cent lower through the year.
The ABS estimates that net exports are expected to detract 1.8 percentage points from GDP growth in the September quarter, reflecting a decrease in export volumes and an increase in import volumes.
Export volumes fell by 2.3 per cent in the September quarter, to be 0.2 per cent lower through the year. Exports of rural commodities, non-rural commodities and other goods all fell in the quarter. These falls were partially offset by increases in exports of services and manufactures.
Import volumes rose by 5.8 per cent in the September quarter, but remain 8.2 per cent lower through the year. The increase in imports was broadly-based, with capital goods, services and consumption goods imports all rising in the quarter.
Net foreign debt was $637.5 billion in the September quarter, representing 53.0 per cent of year‑ended June quarter GDP. Australia's debt servicing ratio was 11.2 per cent in the September quarter.
The Rudd Government's nation building infrastructure investments will help expand Australia's economic capacity, and will provide a strong basis for growth in jobs and exports in the future as the global economy recovers.
8 December 2009