Current account deficit blows out

The September quarter balance of payments figures are out and nobody will be surprise to see a blowout in the current account to -14.9 billion from a revised higher deficit of  -12.3 billion in June:

On the back of an envelope, the CAD is now running around 5% of GDP if annualised. that might sustainable but you would not want to see it get much worse in the post-GFC environment of jumpy ratings agencies. Here are the internals:

For the purposes of GDP, net exports were up very slightly at 0.1% slightly better than the expected zilch. Dollar dropped 10 pips.


  1. I am expecting a TOT crisis in about 3-5 years, maybe its coming sooner.
    Data is too late to stop the interest rate cut.

  2. is it true to say that given our large overseas debt that lower rates contribute to a lower CA deficit. If this is the case then we are getting a whole lot worse despite lowering rates. What will it look like if mortgage rates are back at 8-9%?

    • SquirellNo lowering rates doesn’t lower the CAD. Lower rates tend to increase a CAD.
      With mortgage raters at 8 to 9%, other things being equal, the CAD would likely be a lot less.

  3. GunnamattaMEMBER

    Australian consumption is just like Mr Creosote…

    ‘juts a little more, its wafer thin’

    then boom

  4. Hell Lower interest rates and a higher CAD!

    Lucky we got some more mines and good Ag land to flog to the foreigners to pay for our imports. No worries! Drop interest rates! Let’s party!

  5. Almost time for another Buy Australian campaign.

    Only need to work out what is left that is made here.

  6. The best you can do now Neznam is to label it “Made in China for XYZ Pty Ltd. An Australian Owned Company”