The shortfall on goods, services and investment increased to A$14.89 billion ($14.5 billion) from a revised A$9.64 billion in the fourth quarter of 2011, the Bureau of Statistics said in Sydney today. The median estimate in a Bloomberg News survey of 20 economists was for a A$14.85 billion deficit.
Reserve Bank of Australia Governor Glenn Stevens will lower the benchmark interest rate to 3.5 percent today, according to most economists surveyed by Bloomberg. A high currency has hurt earnings for manufacturers and retailers, helping create what the RBA has referred to as a multi-speed economy with those industries lagging behind the performance of companies linked to the nation’s mining investment boom.
The report reflects “falls in export prices and iron ore export volumes,” Andrew McManus, an economist at Australia & New Zealand Banking Group Ltd. (ANZ), wrote in a research report before today’s release. “The continued ramp up of mining projects, which is partly funded by foreign investment, is also expected to see an increase in income payments overseas.”
Net exports subtracted 0.5 percentage point from gross domestic product growth in the first quarter, the statistics bureau said today.
The net-income deficit was A$11.67 billion in the first quarter, little changed from an A$11.74 billion shortfall in the previous three months, today’s report showed. The goods and services trade balance recorded a A$3.06 billion deficit in the first quarter compared with a A$2.25 billion surplus in the prior quarter.
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.
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