Pete Wargent blogspot

CEO AllenWargent Property Buyers, & WargentAdvisory (institutional). 6 x finance author.

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Wednesday, 7 September 2016

National Accounts day! (100 not out)

Headline GDP looks good

Favourable GDP partials have been reported this week.

Although net exports will be a drag this time around, there was a particularly a big drive in public demand (+2.7 per cent) including a surge in investment, suggesting that today's National Accounts could show that the economy grew anywhere from +3.3 to +3.5 per cent over the year to June.

Watch out for downward revisions to the first quarter.

This will notch up an amazing 100 consecutive quarters without a technical recession for Australia.

The terms of trade also posted a welcome +2.4 per cent increase in the June quarter.

All great news.

On the other hand, the mostly ignored Balance of Payments figures showed the current account deficit widening from $14.9 billion to $15.5 billion in seasonally adjusted terms.

Meanwhile, net foreign debt rose by $22 billion to $1,044 billion from $1,022 billion in March, and as a share of annual GDP net foreign debt rose to a fresh high of 63.8 per cent. 

Of course, borrowing is very cheap right now, so debt servicing costs are at a 15-month low in declining from 8.1 per cent to 7.2 per cent.

I'll take a look through the National Accounts later.