Current account blows out

Tuesday, 5 June 2012

The ABS has released the March quarter current account balance and the blowout has begun with a current account deficit (CAD) of -14892 million recorded. That was slightly worse than consensus at -14850. This subtracted 0.5 points of GDP in the quarter:

Here are the internals:

The big turnaround is obviously in exports, with imports remaining strong.

This equates to a CAD of roughly 4-5% of GDP for the quarter. Given the smallish fall in our terms of trade to date, this does not bode well for the CAD later in the year.

About the author

David Llewellyn-Smith is Chief Strategist at the MB Fund and MB Super. David is the founding publisher and editor of MacroBusiness and was the founding publisher and global economy editor of The Diplomat, the Asia Pacific’s leading geo-politics and economics portal. He is also a former gold trader and economic commentator at The Sydney Morning Herald, The Age, the ABC and Business Spectator. He is the co-author of The Great Crash of 2008 with Ross Garnaut and was the editor of the second Garnaut Climate Change Review.