Australia ended 2024 with an annual current account deficit of $52.4 billion (US$32.8 billion), the worst result since 2016, according to the latest data from the Australian Bureau of Statistics (ABS).
This is despite the balance improving by $1.3 billion (seasonally adjusted, current prices) to a deficit of $12.5 billion in the December quarter 2024. This is the second consecutive improvement to the balance, which was at its worst point during the June quarter 2024 when it fell to a deficit of $16.3 billion.
However, it is still the country’s seventh straight current account deficit, meaning people and businesses are spending substantially more on imported goods and services than they are exporting.
Tom Lay, ABS head of International Statistics, attributed the improvement to a surplus on trade in goods and services increasing $3.7 billion to $7.5 billion.
It was the first rise in the terms of trade since December 2023, driven by growth in export prices for iron ore and gold. However, this was partly offset by the net primary income deficit (where income is sent abroad), which widened by $2.3 billion to $19.8 billion.
Exports rose across rural goods, iron ore, and intellectual property services 2.9 percent in the December quarter, led by exports of chickpeas after India temporarily lifted tariffs on chickpea imports.
Services exports were also up 4.6 percent, driven by increased intellectual property services related to pharmaceuticals and computer software.
“Other personal travel also rose this quarter, with visitors from the United States of America driving the rise, with overseas travellers benefiting from the depreciation of the Australian dollar against the U.S. dollar,” Lay said.
Imports of goods rose 1.5 percent, driven by a rise in electric vehicle imports.
Processed industrial supplies also rose, with increases in fertiliser imports.
“The number of Australians travelling overseas remained high following elevated travel to Europe in the September quarter. In contrast, the December quarter saw Australians favouring destinations less expensive and closer to home,” Lay said.
Spending on Food Up
While other figures released today showing a rise in retail spending are good news for that sector, which is still struggling post-pandemic, it could also mean that the deficit may grow further in the March quarter unless exports lift further.According to the ABS’s seasonally adjusted figures, Australian retail turnover rose 0.3 percent in January 2025, following a fall of 0.1 percent in December 2024 and a rise of 0.7 percent in November.
Robert Ewing, ABS head of business statistics, said that while the growth in retail spending since mid-2024 had been due to more discretionary spending, the January increase had been driven mainly by food-related spending.
Food-related spending bounced back in January following falls in the previous month, with rises in both cafes, restaurants and takeaway food services (1.1 percent) and food retailing (0.7 percent).
“Bumper crowds across large-scale events, including record attendance at the Australian Tennis Open and cricket events, lifted spending in catering services,” Ewing said.
“Food retailing also rebounded in January, particularly in Victoria where supply chain disruptions negatively impacted December supermarket spending.”
Most non-food industries rose, led by other retailing (2.4 percent), clothing, footwear and personal accessory retailing (2.0 percent), and department stores (0.6 percent).
This was partly offset by a large fall in household goods retailing (-4.4 percent).
“The fall in household goods follows four straight rises driven by widespread discounting activity around Black Friday and Cyber Monday sales events,” Ewing said.
“Consumers bought furniture and electrical goods in earlier months to take advantage of the large discounts on offer.”
