A month ago we forecast that Australia would report its second-ever quarterly current account surplus in a row because of a record trade surplus of more than $21 billion in the three months to the end of September.
Yesterday the Australian Bureau of Statistics confirmed that forecast in the releasing the current account data for the September quarter showing a surplus for the three months of $7.9 billion.
That took the total for the six months from March 1 to $13.8 billion after the $5.9 billion surplus reported in the three months to June.
The ABS said quarterly trade surplus was the “largest ever at $21.1 billion”. ($19.9 billion in the June quarter)
And with a slightly smaller net income deficit of $13.0 billion ($13.9 billion in the June quarter) Australia recorded a seasonally adjusted $7.9 billion current account surplus for the September quarter 2019.
In yesterday’s ABS statement, Bureau Chief Economist Bruce Hockman said: “For the first time in 46 years, we have had two consecutive current account surpluses.”
“Strong export volumes for non-monetary gold reflected global geopolitical developments, whereas iron ore and LNG have shown sustained high export levels, LNG exports, in particular, reflecting the production impact of the mining boom. Volumes remained steady for imports overall and resulted in an increased September quarter trade surplus.”
The ABS said that in seasonally adjusted terms chain volume terms, “the balance on goods and services surplus rose $1.0 billion, widening the surplus to $9.3 billion, with an expected contribution of 0.2 percentage points to growth in the September quarter 2019 Gross Domestic Product.
That will be down sharply from the 0.6 percentage point contribution in the June quarter and equal to the reported March quarter contribution.
The ABS also reported that Australia’s net international investment position fell $22 billion in the quarter to a liability of $976.0 billion at September 30, from the revised 30 June 2019 position of $998.0 billion.
Australia’s net foreign debt liability position rose $20.4 billion to $1,163.3 billion but that was offset somewhat as Australia’s net foreign equity asset position rose $42.4 billion to $187.4 billion at the end of September, producing the fall in the net international investment position.
Meanwhile, data on government financial transactions in the quarter (spending and inflows) indicate a contribution of around 0.3 percentage points to GDP for the September quarter.
But with negative contributions from retail sales of around 0.1 points, construction, negative 0.2 and investment, negative 0.2% and weaker sales, wages and profits, September quarter GDP could be very weak.
Forecasts suggest anywhere from 0.2% to 0.6%, quarter on quarter and an annual rate of 1.5% to 1.8%.