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Current account surplus grows to $7.855b

Australia’s current account surplus widened to a larger than expected $7.855 billion in the September quarter despite a drought-related decline in export of rural goods.

Exports of rural goods fell by 3.0 per cent in both volume and value, with a 16 per cent fall in wool and sheepskin volumes and a 2.0 per cent fall in cereals volumes.

But a sharp increase in exports of non-monetary gold helped lift the balance from a revised $4.669 billion in the June quarter, which featured Australia’s first surplus since June 1975.

The Australian Bureau of Statistics said on Tuesday that net export volumes are expected to contribute an estimated 0.2 per cent to September quarter GDP growth.

Economists raised their estimates for Wednesday’s GDP growth data to between 0.5 and 0.6 per cent, but BIS Oxford Economics chief economist Sarah Hunter warned that import data confirmed the domestic economic environment remained challenging.

“Consumer goods, capital goods and services all fell, highlighting the weakness of spending momentum in the local economy,” Dr Hunter said.

“The fall back in the volume of capital goods is particularly worrying, as this suggests that business investment may disappoint over the near term.”

Dr Hunter said that fall back – allied with last week’s 0.2 per cent seasonally adjusted drop in capital expenditure for the quarter – highlights the drag on investment intentions amid stuttering business confidence.

The September quarter GDP figure will be released on Wednesday.

Import volumes of consumer goods fell by 1.0 per cent and capital goods fell 6.0 per cent, while services showed a net deficit of $350 million.

The Australian dollar was largely unmoved by the data’s release and was worth 68.19 US cents at 1224 AEDT.

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