Australia’s current account deficit widened to $10.7 billion (US$7.2 billion) in the June quarter of 2024, according to the Australian Bureau of Statistics (ABS) on Sept. 3.
This represents the largest deficit since June 2018, driven by declining commodity prices and increased income payments to non-residents.
The balance on goods and services dropped by $3.9 billion, settling at $12.0 billion, while the net primary income deficit increased by $0.5 billion to $22.5 billion.
A 4.4 percent decrease in goods exports, particularly lower prices for key exports like iron ore and coal, contributed significantly to the decline.
The ABS’s Tom Lay highlighted the factors contributing to this downturn.
“This quarter’s current account deficit reflects continued falls in bulk commodity prices and higher income paid to non-residents,” he said.
Iron ore and coal prices fell for the second consecutive quarter, leading to a 5.4 percent drop in goods export prices compared to the same period last year.
Despite these setbacks, the services export sector saw some relief, rising by 6 percent, driven by education-related travel services.
On the import side, goods imports slightly decreased by 0.6 percent, primarily due to reduced imports of capital goods.
Services imports rose by 1.1 percent after two consecutive quarterly declines, driven by increased spending on various service categories.
Australia’s terms of trade fell by 3 percent from the previous quarter and was down 3.8 percent compared to the June quarter of 2023.
The data presents a significant challenge for the government, which is already grappling with inflation and increased living costs.
Treasurer Jim Chalmers faced accusations of deflecting blame onto the Reserve Bank of Australia (RBA) ahead of GDP numbers expected on Sept. 4.
In response to the accusations, Chalmers stated that both the RBA and the government are working towards the same goal.
Shadow Treasurer Angus Taylor argued that there are multiple measures to control inflation, criticising the Opposition’s stance on government spending.
