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Balance of payments: April 1994



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CANBERRA

30 May 1994

COMMONWEALTH PARLI AMENTARY LIBRARY MICAH

57

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TREASURER

PRESS

RELEASE NO.

BALANCE OF PAYMENTS: APRIL 1994

The preliminary balance of payments estimates for April 1994 released today by the Australian Statistician indicate a seasonally adjusted current account deficit of $1,632 million.

This result is within the broad range of market expectations.

The April result was $251 million higher than the previous month.

The deficit on the merchandise trade balance increased, with exports falling by 5 per cent from very high levels in March while imports fell by 3 per cent. The net income deficit also increased.

Revisions (predominantly to net income) have lowered the deficit for the first nine months of 1993-94 by almost $700 million.

Comparing the ten months to April 1994 with the same period a year earlier:

The cumulative current account deficit is $376 million (or 3 per cent) lower.

This reflects a significant improvement of almost 60 per cent in the net services deficit (mainly due to increased tourism exports) and a lower net income deficit. These movements were partly offset by a turnaround from surplus to deficit on the balance of trade and a lower net unrequited transfers surplus.

Exports of goods and services rose by 8 per cent despite subdued world economic activity.

— A strong rise in exports of higher valued goods underpinned this increase, with elaborately transformed manufactures (machinery, transport equipment, and 'other' manufactures) rising by 17 per cent - confirmation of the increasing outward orientation of the Australian manufacturing sector.

An increase of 13 per cent in export services also made an important contribution.

Imports of goods and services rose by 7 per cent, with capital goods (excluding civil aircraft) up 13 per cent, intermediate and other goods up 9 per cent, consumption goods up 8 per cent and service imports up 3 per cent.

Today's figures are consistent with the 1994-95 Budget forecast of a 1993-94 current account deficit of around $16 billion. This would represent a considerable improvement on the original forecast in the 1993-94 Budget of an $18 billion deficit, when growth of GDP was forecast to be only 2 N per cent compared to the current growth forecast of four per cent.