Australia’s current account deficit narrowed slightly in the June quarter 2025, improving by $0.4 billion to $13.7 billion in seasonally adjusted current prices, according to the Australian Bureau of Statistics (ABS).
ABS head of international statistics Jonathon Khoo said: ‘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.’ He added: ‘Growth in Investment inflows on Australian holdings of overseas equity saw the net primary income deficit narrow to its lowest level since September 2021.’ He said: ‘Strong imports of non-monetary gold and travel services led to a fall in the goods and services surplus.’
Australia’s terms of trade fell 1.1 per cent from the March quarter and were 2.4 per cent lower than a year earlier, driven by weaker commodity prices, particularly iron ore and coal.
Imports of goods and services rose 0.8 per cent over the quarter, led by a 3.4 per cent rise in services. travel services climbed 5.0 per cent as more Australians headed to long‑haul destinations such as the UK and Italy for holidays, with closer hotspots like Indonesia still drawing strong demand. Goods imports edged lower overall, with declines in fuels and lubricants and capital goods n.e.s. offset by gains in non‑monetary gold and ADP equipment, including large data servers and processing units. Non‑monetary gold imports hit record levels after strong exports in March, while elevated gold prices contrasted with fuels and lubricants prices, which fell to their lowest since September 2021 amid excess OPEC+ supply and easing demand.
Exports were broadly steady overall as a 0.9 per cent fall in goods offset a 3.6 per cent rise in services. The goods decline followed a 2.1 per cent rise in March and was led by metal ores and minerals and coal, coke and briquettes, with lower prices weighing. Mr Khoo said: ‘Iron ore prices fell amid international trade uncertainty and higher global supply,’ and ‘Coal prices fell for the third consecutive quarter, reflecting weak global demand.’ Services exports were supported by a 4.9 per cent lift in travel services, driven by more visitors — particularly New Zealanders — coming to Australia to visit friends and relatives.
The net primary income deficit narrowed by $1.2 billion to $16.8 billion in the quarter, its smallest since September 2021. The improvement was driven by a $1.1 billion increase in primary income credits, reflecting higher profits from Australian direct investment abroad and continued strong returns on Australian portfolio equity holdings. Primary income debits fell by $0.1 billion as foreign direct investors in Australia earned weaker profits, partly offset by solid dividend payments from Australian depository corporations to overseas portfolio investors.
On the financial account, there was a $17.5 billion surplus, underpinned by net equity inflows of $16.1 billion and net debt inflows of $1.4 billion. Mr Khoo said: ‘Australia’s net international investment liability position had the largest widening in a quarter since March quarter 2022.’ He added: ‘Volatility in international markets saw international investors increase their demand for Australian equity.’ Australia’s net foreign debt liability position rose $22.6 billion to $1.43 trillion, reflecting market price gains and new debt issuance. Price movements were shaped by shifts in Australian and global bond yields and hedging activity amid volatile exchange rates. Australia’s net foreign equity asset position fell by $3.4 billion to $761.5 billion.
In volume terms, net trade rose by $0.9 billion and is expected to add 0.1 percentage points to June quarter GDP. The ABS will release the June quarter 2025 Australian National Accounts on 3 September 2025.
Source: Australian Bureau of Statistics.
