Australia's Q1 current account much worse-than-expected

Australia's March quarter current account data came at -3.1bn vs -0.5bn exp and -3.5bn last, revised from -3.9bn. Meanwhile, net exports as a % of GDP, stood at -0.7% vs -0.4% exp and +0.20% last, suggesting a potential downgrade for tomorrow's GDP. 

KEY POINTS

BALANCE OF PAYMENTS: The current account deficit, seasonally adjusted, fell $403m (11%) to $3,108m in the March quarter 2017. There was an increase of $3,129m (51%) on the balance on goods and services, resulting in a surplus of $9,242m in the March quarter 2017. The primary income deficit rose $2,712m (29%) to $11,940m. In seasonally adjusted chain volume terms, the surplus on goods and services fell $2,966m (85%) from $3,509m in the December quarter 2016 to $543m in the March quarter 2017. This is expected to detract 0.7 percentage points from growth in the March quarter 2017 volume measure of GDP.

INTERNATIONAL INVESTMENT POSITION (IIP): Australia's net IIP liability position was $1,025.5b at 31 March 2017, a decrease of $2.7b on the revised 31 December 2016 position of $1,028.2b. Australia's net foreign debt liability decreased $13.6b (1%) to $1,015.0b. Australia's net foreign equity had a turnaround of $10.9b from a net asset position of $0.3b at 31 December 2016 to a net liability position of $10.6b at 31 March 2017.