Australia's current account deficit remained at around 2% of GDP in the June quarter. Export revenue was held flat - despite underlying volumes rising (1.7%) - as uncertainty around global trade caused by the US administration's tariff regime weighed on commodity prices. Expenditure on imports meanwhile rose 0.8% in the quarter. Overseas travel underpinned a pick-up in import volumes (1.4%) while import prices eased (-0.7%). The overall dynamics are broadly neutral for GDP growth in the June quarter, with net exports to add just 0.1ppt.
Australia's current account - the nation's position on trade and financial transactions with the rest of the world - remained in deficit for the 9th consecutive quarter. Effectively, more capital has flowed out of Australian than has come in over this period - a factor that has contributed downward pressure on the Australian dollar, which in trade weighted terms is down more than 1.5% since the end of the June quarter 2023. In nominal terms, the current account deficit was $13.7bn (around 2% of GDP), narrowing slightly from a deficit of $14.1bn in the March quarter.
Australia actually runs a surplus on its trade in goods and services with the rest of the world, though it narrowed in this latest quarter from $4.3bn to $3.1bn. However, the nation has an income deficit: payments to overseas investors (dividends, interest payments etc) exceed returns earned by domestic investors offshore. That deficit narrowed in the June quarter to $16.8bn from $18bn - a $1.2bn improvement that offset the reduction in the trade surplus, leaving the current account deficit little changed.
Export revenue was flat at $164bn in the quarter (1.9%Y/Y) - that was despite the volume of goods and services exported rising at a decent clip of 1.7%, its fastest rise in 2 years. Higher volumes were supported by resources (2%), rural goods (1.7%) and services (3.3%) on the back of strong inbound travel (4.8%). However, despite strength in demand for Australian exports, the prices of those exports fell overall by 1.7% in the quarter; declines in commodity prices were a key factor.
Import spending rose in Q2 by 0.8% to $160.9bn (4.9%Y/Y). That movement was driven by a lift in demand, with import volumes advancing by 1.4% - the strongest increase since Q1 2024 - against a 0.8% decline in import prices. In volume trade, services (3%) was the key driver of strength, with offshore travel up 3.5%. Goods imports lifted 0.8% on the back of consumption goods (3.5%), reflecting import orders for vehicles (6.3%), clothing and footwear (7.2%), and leisure goods, toys and books (7.9%). Non-monetary gold (37.7%) was also a factor amid volatility on global markets.
Following today's report, the ABS has put the contribution from net exports to GDP growth in the June quarter at a broadly neutral 0.1ppt. The US administration's tariffs have led to significant volatility in global trade flows, with resulting impacts on GDP growth. That, however, has not been the case in Australia.
