Current Account and GDP Preview - Solid Growth Expected

• The current account deficit narrowed to $10.5 billion in the March quarter, from $14.7 billion in the December quarter of last year. The improvement was mostly a result of a turnaround in exports and an improvement in the trade balance from a deficit of $1.0 billion to a surplus of $4.1 billion in the March quarter. 
• Export volumes recovered 2.4% in the March quarter, after falling 1.5% in the December quarter, mostly reflecting an improvement in key resource commodities.
• Import volumes rose a modest 0.5% in the March quarter, following a 1.6% lift in the December quarter.  The detail was mixed – consumption-goods imports fell 0.3%, highlighting the headwinds facing the consumer sector. On the other hand, capital-goods imports grew a solid 4.3%, pointing to strength in business spending.
• Net exports are expected to contribute 0.3 percentage points to GDP growth in the March quarter. It follows a detraction of 0.5 percentage points in the December quarter.  
• We expect 0.9% GDP growth in the March quarter and 2.8% in the year. The turnaround in exports is one of the factors behind the strong outcome, after exports contracted over the December quarter. We are also expecting modest growth in domestic demand, including household consumption, public spending and business spending. Inventories are also expected to provide a positive contribution to growth in the quarter.

 

Please see the attached report for more information.

Download.pdf Back to News