Australia’s current account deficit widened in Q3 2025 due to higher imports and a larger income deficit, despite record capital inflows and strong export growth.

Australia’s current account deficit widened to A$16.6 billion in the third quarter of 2025, exceeding forecasts, driven by higher imports and a larger net secondary income deficit, though the primary income deficit narrowed. Strong foreign investment inflows pushed the capital and financial account surplus to a record A$31.1 billion. The terms of trade rose slightly to 95.5, reflecting stronger export prices and lower import prices, aided by a stronger Australian dollar and China’s stimulus. Export growth was led by iron ore, coal, and record gold shipments, while services exports rose, particularly in travel. The net international investment liability position increased to A$665.2 billion, signaling growing foreign liabilities.