Australia posted its ninth consecutive current account deficit in the June quarter 2025, with the balance rising by $0.4 billion to a deficit of $13.7 billion, according to the latest data from the Australian Bureau of Statistics (ABS).
The result comes amid a “slow motion” economic recovery, as highlighted by the Westpac-Melbourne Institute Leading Index, which points to only modest GDP growth of 1.7% in 2025 and a return to trend not expected until late 2026.
Adding to the challenge, inflation has re-accelerated: the ABS reported the Consumer Price Index rose 2.8% in the year to July 2025, up from 1.9% in June and marking the highest annual inflation rate since July 2024
“The small rise in the current account balance was due to a $1.2 billion increase in the net primary income balance, offset by a $1.2 billion decrease in the goods and services surplus,” said Jonathon Khoo (pictured right), ABS head of international statistics, in a media release.
“Growth in investment inflows on Australian holdings of overseas equity saw the net primary income deficit narrow to its lowest level since September 2021.”
Imports of goods and services increased 0.8% in the quarter, led by a 3.4% rise in services.
“Strong imports of non-monetary gold and travel services led to a fall in the goods and services surplus,” Khoo said.
Travel services rose 5%, with more Australians travelling to long-haul destinations such as the UK and Italy, while closer destinations like Indonesia remained popular. Imports of non-monetary gold reached record levels, offsetting slight falls in fuels and capital goods.
Gold prices remained elevated, but “fuels and lubricants prices dropped to their lowest level since September quarter 2021 due to excess global supply from OPEC+ nations along with falling demand.”
Exports of goods fell 0.9% after a rise in the previous quarter, led by declines in metal ores and coal.
“Iron ore prices fell amid international trade uncertainty and higher global supply,” Khoo said. “Coal prices fell for the third consecutive quarter, reflecting weak global demand.”
However, export of services rose 3.6%, with a 4.9% increase in travel services driven by more visitors – particularly New Zealanders – coming to Australia.
The net primary income deficit narrowed by $1.2 billion to $16.8 billion, thanks to a $1.1 billion increase in inflows.
This was “driven by higher profits for Australian direct investment holdings and continued strong returns on Australian portfolio investment holdings of equity.”
Outflows fell slightly due to weaker profits from foreign direct investment in Australia.
Australia’s financial account recorded a $17.5 billion surplus, with net inflows of equity (+$16.1 billion) and debt (+$1.4 billion).
“Australia’s net international investment liability position had the largest widening in a quarter since March quarter 2022,” Khoo said. “Volatility in international markets saw international investors increase their demand for Australian equity.”
Australia’s net foreign debt liability rose by $22.6 billion to $1.43 trillion, driven by market price increases and new debt acquisition. The net foreign equity asset position fell by $3.4 billion to $761.5 billion.
ABS expects the $0.9 billion rise in net trade (seasonally adjusted, chain volume measure) to add 0.1 percentage points to June quarter 2025 GDP growth.
For mortgage brokers, ongoing current account deficits and international market volatility may influence interest rates, currency movements, and investor sentiment—factors that can affect mortgage pricing and demand. Stay informed on economic trends to better advise clients on timing and product selection.
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