All the talk today will be about the reduction in the current account deficit thanks to increased goods and services exports as shown in the ABS release to Sept 2018. International trade is expected to contribute 0.4 percentage points to growth in the September quarter 2018 Gross Domestic Product.
But the real story should be the continued expansion of foreign debt to $1,044 billion in Sept 2018. This is where our exposure is to rising interest rates (and we know already the US will continue to hike rates). The 1 Year LIBOR rate, for example, is rising still and this foreshadows real issues ahead. The debt bomb is alive and well….
Australia’s current account deficit in seasonally adjusted terms decreased $1,368 million in the September quarter 2018 driven mainly by increased goods and services exports, according to latest figures from the Australian Bureau of Statistics (ABS).
The balance on goods and services surplus in the September quarter 2018 was $6,607 million, a rise of $2,704 million. Exports of goods and services rose $3,390 million (3 per cent) following a continued rise in exports of other mineral fuels which includes natural gas, offset by rising imports of goods and services, up $688 million (1 per cent). The net primary income deficit widened by $1,162 million to $16,911 million in the September quarter 2018.
In volume terms, imports falling and strong exports resulted in an expectation for international trade to contribute 0.4 percentage points to growth in the September quarter 2018 Gross Domestic Product. In seasonally adjusted chain volume terms, the balance on goods and services surplus increased $1,603 million, widening the surplus to $2,853 million.
Australia’s net international investment position was a liability of $940.2 billion at 30 September 2018, a decrease of $17.3 billion on the revised 30 June 2018 position of $957.5 billion.
Australia’s net foreign equity asset position increased $29.9 billion to $103.9 billion at 30 September 2018. Australia’s net foreign debt liability position increased $12.6 billion to $1,044.0 billion.
