Highlights
Australia’s current account has recorded yet another surplus, leading Australia to a record of 13 consecutive quarters in surplus. The surplus has grown from $2.8bn in the March quarter, to $18.3bn in the June quarter (3.0% of GDP).
The key to this gain was a record trade surplus, increasing from $16.3bn in the March quarter, to $43.1bn (7.2% of GDP) in the June quarter.
Other Interesting Information
Export earnings increased dramatically in the first 2 quarters of the year, up 10.4% in March quarter and 14.7% in the June quarter. In the June quarter export volumes rose by 5.5%, meaning the remainder of the 14.7% gain was due to price increase.
Terms of trade has increased 7.5% over the year, and 4.6% in the June quarter alone. Terms of trade is currently sitting at a record level, which is 77% above the long-run average. This has significantly boosted the export earnings shown above.
The volume of service imports has risen massively in the first half of the year, with a 27.6% rise in March quarter and a further 14.3% in the June quarter. Since the end of 2019 (pre-pandemic), we have had a decline in the volume of service imports of 32.4%. Therefore, the gains above demonstrate an erosion of that decline in service imports. The main catalyst is a return to international travel, caused by the reopening of the Australian border.
Service exports have increased 5.3% in the March quarter and 13.7% in the June quarter. However, service export volumes are still down 38% from pre-pandemic levels. This is caused by a slowdown in exports such as tourism and education.
Manufactured goods exports are still down 14.7% from pre-pandemic levels. This is due to the struggles in the global supply chain as the pandemic came to an end.
Source: Westpac
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