Australian current account surplus surged above market expectations in the third quarter. The surge was driven by a further rise in the trade balance and a sharp decline in the income deficit. The current account surplus improved upon the revised AUD 4.7 billion surplus seen in the second quarter. The trade balance rose to AUD 21.1 billion from AUD 19.3 billion, while the income deficit dropped to AUD 13 billion from AUD 14.6 billion.
The volumes of export rose 0.7 percent quarter-on-quarter, aided by a rise in resources that rose 1.4 percent. Drops in coal exports were countered by a rise in other minerals, which included LNG, which rose 2.9 percent quarter-on-quarter and iron ore that rose 1.6 percent. Rural goods dropped again in the quarter, down 2.8 percent, with softness seen through most rural categories. Non-monetary gold rose sharply by 30.8 percent quarter-on-quarter in the third quarter, after the 12 percent fall in second quarter.
Volumes of import dropped 0.2 percent quarter-on-quarter, which reflects mixed results throughout the categories. Intermediate goods rose 2.1 percent quarter-on-quarter, whilst capital goods dropped 5.6 percent. However, consumption goods dropped slightly 0.5 percent quarter-on-quarter. The terms of trade rose only 0.4 percent, reflecting a rise in both export prices and import prices.
“Net exports will once again add to GDP growth this quarter and, with other sectors remaining weak, further growth in exports will be important for overall growth”, said ANZ in a research report.
