Commodity prices to drag down Q1 national income

The RBA has released its commodity price index for April, which rebounded 1.4% in SDR (currency weighted) terms – the key determinant of the terms-of-trade – but slumped by 8.1% over the year:

Preliminary estimates for April indicate that the index increased by 1.4 per cent (on a monthly average basis) in SDR terms, after decreasing by 3.8 per cent in March (revised). The non-rural sub-index increased in the month, while the rural and base metals subindices decreased. In Australian dollar terms, the index decreased by 0.3 per cent in April.

Over the past year, the index has decreased by 8.1 per cent in SDR terms, led by lower coal, oil, iron ore and alumina prices. The index has increased by 2.2 per cent in Australian dollar terms.

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