Commodity prices lead Australia into deficit in Q3

The news: Australia's current account balance fell by $7.9 billion to a $0.2 billion deficit in the September quarter, tracking a slide in key commodity prices such as coal and LNG, ABS figures show.

The numbers: The balance on goods and services fell $8.0 billion to $22.8 billion while the net primary income deficit narrowed $0.4 billion to $22.3 billion. The terms of trade fell 2.6%. Commodity prices and lower volumes drove goods exports down 3.1%. Prices of goods exported fell for the fifth straight quarter — driven by lower coal and agricultural commodity prices — and are 13.3% lower than the same time last year.

The context: While the high global energy prices and supply chain disruptions of 2021-22 have continued to normalise, Australian miners have faced high cost pressures and lower commodity prices in the first half of 2023. Exports and imports of travel services are continuing to recover as international students return after pandemic border closures and Australians continue overseas travel, although travel services remain 11% below pre-pandemic levels.