Balance of payments adds to GDP

From the ABS this morning it’s no surprise to see a slight beat on the Balance of Payments as iron ore rebounded strongly in the quarter:

The current account deficit, seasonally adjusted, fell $370m (2%) to $14,678m in the December quarter 2012. The deficit on the balance of goods and services rose $164m (3%) to $5,553m. The primary income deficit fell $518m (6%) to $8,829m.

In seasonally adjusted chain volume terms, the surplus on goods and services rose $2,153m (129%) from $1,663m in the September quarter 2012 to $3,816m in the December quarter 2012. This is expected to contribute 0.6 percentage points to growth in the December quarter 2012 volume measure of GDP.

$15.3 billion and 0.5 per cent were consensus.

The current account deficit is running at a manageable 4.5% for now.

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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.