Australia’s current-account deficit widened more than economists forecast in the three months through September on weaker prices for iron ore and coal, the nation’s two biggest commodity exports.
The shortfall on goods, services and investment was A$14.9 billion ($15.5 billion) from a revised A$12.4 billion in the second quarter, the Bureau of Statistics said in Sydney today. The median estimate in a Bloomberg News survey of 24 economists was for a A$14.6 billion gap. Net exports added 0.1 percentage point to gross domestic product growth in the third quarter, the bureau said today.
Reserve Bank of Australia Governor Glenn Stevens has reduced the benchmark interest rate by 1.5 percentage points since November last year to stimulate industries outside of resources as commodity prices ease. A high currency has hurt earnings for manufacturers and retailers, helping create what the RBA has referred to as a multispeed economy with those industries lagging behind mining companies.
The result reflects “drags from the terms of trade,” Stephen Walters, JPMorgan Chase & Co.’s chief economist in Australia, said before the report, referring to a weakening in the export prices that have driven the nation’s wealth gains.
The net-income deficit was little changed at A$10 billion in the third quarter from the April-June period, today’s report showed. The goods and services trade balance recorded a A$4.65 billion deficit in the third quarter compared with a A$2.11 billion shortfall three months earlier.
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.