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Australia Third-Quarter Current-Account Deficit Widens as Currency Gains
Australia’s current-account deficit widened in the three months through September as a strengthening currency lowered exports.
The shortfall on goods, services and investment increased to A$7.83 billion ($7.55 billion) from a revised A$5.41 billion in the second quarter, the Bureau of Statistics said in Sydney today. The median estimate in a Bloomberg News survey of 22 economists was for an A$6.6 billion gap.
The value of exports dropped from July through September for the first time in a year as the Australian currency climbed 15 percent over the period, the second-biggest quarterly gain in more than three decades. Exports were a near-record $74.5 billion in the second quarter as demand surged for minerals such as iron ore.
“Australia’s current-account deficit will widen further over 2011-12 as increased net capital inflows to fund the strong investment cycle offset a growing trade surplus,” Katie Dean, head of Australian macroeconomics at Australia & New Zealand Banking Group in Melbourne, said before the report.
The current account is the broadest measure of trade because it includes investment flows as well as goods and services shipments. A deficit represents money Australia has to borrow overseas to pay for the goods and services it imports, and to finance investment not covered by local savings.
Growth Drag
Net exports subtracted 0.4 percentage point from gross domestic product growth in the third quarter, the bureau said today.
GDP rose 0.5 percent in the three months through September from the previous quarter, when it surged 1.2 percent, according to the median of 24 estimates in a Bloomberg News survey. The figures will be released tomorrow at 11:30 a.m. in Sydney.
The net-income deficit widened to A$13.2 billion in the third quarter from A$11.5 billion in the previous three months, today’s report showed. The goods and services trade balance recorded an A$5.8 billion surplus in the third quarter compared with an A$6.6 billion surplus in the prior quarter.
To contact the reporter for this story: Michael Heath in Sydney at mheath1@bloomberg.net
To contact the editor responsible for this story: Chris Anstey in Tokyo at canstey@bloomberg.net
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