Australia Posts Largest Current Account Gap on Record

Australia’s current account deficit widened to AUD 27.1 billion in the first quarter of 2026 from an upwardly revised AUD 23.0 billion in the previous quarter, exceeding market expectations of an AUD 23.0 billion shortfall. It was the largest current account deficit on record, as the goods and services balance swung to an AUD 2.4 billion deficit from an AUD 1.1 billion surplus in Q4, amid rising oil prices following the closure of the Strait of Hormuz. Additionally, the secondary income deficit widened to AUD 1.0 billion from AUD 0.8 billion, while the primary income deficit increased to AUD 23.7 billion in Q1 2026 from AUD 23.3 billion in the previous quarter. " Trade in goods and services fell into a deficit for the first time since the December quarter 2017, with exports of mining commodities falling and imports of data centre equipment and fuels rising," Jonathon Khoo, ABS head of international statistics, said.

Australia’s current account deficit widened to AUD 21.1 billion in the fourth quarter of 2025, from an upwardly revised AUD 18.3 billion in the previous quarter and exceeding market expectations of AUD 16.3 billion shortfall. This marked the largest current account gap since Q4 2015, as the goods and services surplus narrowed slightly to AUD 1.3 billion from AUD 1.4 billion in Q3, while the secondary income deficit rose to AUD 0.9 billion from AUD 0.5 billion. Moreover, the primary income deficit climbed to AUD 21.7 billion in Q4 2025 from AUD 19.2 billion in the previous quarter, driven by a AUD 1 billion decline in primary income credits (inflows), partially offset by a AUD 1.6 billion rise in primary income debits (outflows). The drop in inflows largely reflected lower profits from direct investment assets, which slumped 11.2%.

Australia's current account deficit widened to AUD 16.6 billion in the third quarter of 2025, up from an upwardly revised AUD 16.2 billion in the second quarter and exceeding market expectations of a AUD 13.3 billion shortfall. This marked the largest current account gap since the fourth quarter of 2024, as the goods and services surplus declined to AUD 2.5 billion in Q3 2025 from AUD 2.8 billion in the previous quarter, while the net secondary income shifted to a deficit of AUD 0.5 billion from a surplus of AUD 0.06 billion. Meanwhile, the net primary income deficit narrowed to AUD 18.7 billion in Q3 from AUD 19.0 billion in Q2, driven by a AUD1.7 billion rise in primary income credits (inflows) and partly offset by an increase of $1.4 billion in primary income debits (outflows). The increase in inflows was driven by higher profits from Australian direct equity investment holdings and continued strong returns on portfolio equity investments held overseas.