Andrew Hanlan, Research Analyst at Westpac, notes that Australia's current account deficit (CAD) widened modestly but remains well contained as it printed at $13.5bn in the June quarter following a deficit of $11.7bn in March and an average deficit of $12.9bn over the past year.

Key Quotes

“As a share of the economy, the CAD deficit represents 2.9% of GDP. This is below the decade average of 3.6% and well below the post 1990s average of 4.2%.”

“In Q2, the trade balance was a surplus to the tune of $2.8bn, a slight reduction on a $3.3bn surplus in Q1.”

“Export earnings increased by 2.6%, with both volumes and prices moving higher, up 1.1% and 1.4% respectively.”

“The import bill increased by 3.2% largely due to higher prices, up 2.8%.”

“Over the past couple of years, the income deficit has increased by a sizeable $5.8bn on rising returns to foreign investors. By way of context, the net income deficit now represents 3.5% of GDP, in line with the post 1990s average of 3.3%.”