Australia’s terms-of-trade collapses

Tuesday 3 March 2020

Within today’s dump of balance of payments data that feeds into tomorrow’s December quarter national accounts release was the important news that Australia’s terms-of-trade slumped 5.3% in seasonally adjusted terms and by 1.9% in trends terms:

Over the year, the terms-of-trade fell by 0.6% in seasonally adjusted terms but rose by 1.6% in trend terms.

Since the terms-of-trade measures the prices received for Australia’s exports relative to the prices paid for imports, this terms-of-trade result will lower both national disposable income (NDI):

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About the author

Leith van Onselen is Chief Economist at the MB Fund and MB Super. He is also a co-founder of MacroBusiness. Leith has previously worked at the Australian Treasury, Victorian Treasury and Goldman Sachs.