Australia: Current account deficit expected to be -AUD9.55b - TDS

According to analysts at TD Securities, Australia’s December quarter current account deficit is expected to be -$A9.55b or -2% of GDP (mkt -$A9.2b).

Key Quotes

“We already know that the trade surplus was +$A8.5b (exports +3% outpaced imports +1.3%/q) but we assume another modest deterioration in the net income balance. As the terms of trade were favourable this translates into poor volumes, and we expect net exports to be a small -0.1%pts drag on Dec qtr GDP (prior +0.4%pts, mkt -0.1%).”

“Not featured in the BBG calendar (but accounts for 1/4% of GDP) is government spending, and we look for +1.6%/q or +0.4% pts to GDP. A short while later the RBA is expected to continue its run of leaving the cash rate at 1.5%. After a deluge of RBA-speak last month (SoMP, speech, semi-annual testimony) we do not expect any new news to be in the policy statement this time.”