Further signs Australia’s GDP is set to slump

Australia’s economy is showing more signs of weakening ahead of GDP figures being released on Wednesday.

An unexpected fall in Australia’s current account balance has become the latest economic indicator to suggest a sluggish national economy.

While the drag was modest, Australia’s current account balance rose by $1.7bn for the first three months of 2025 to an overall deficit of $14.7bn.

This was larger than a forecast estimate of $12.5bn.

There are further signs of Australia’s economy weakening. Picture: NewsWire / Nicholas Eagar

Oxford Economics Australia lead economist Ben Udy said Tuesday’s current account balance released by the Australian Bureau of Statistics was just another sign of a slowing economy.

“The modest drag from net trade along with recent downbeat GDP particles paints a sombre picture for tomorrow’s GDP reading,” he said.

The decline in the current account balance was largely driven by a fall in the Australian dollar, as net primary income lifted in Q1.

The trade balance changed little in the quarter, as a small improvement in the balance of goods was offset by a $0.2bn fall in the goods and services surplus.

ABS head of international statistics Tom Lay said there was mixed news for commodities.

“Commodity price falls, notably coal, led to Australian mining businesses seeing lower profits flow to foreign direct investors, which reduced Australia’s income outflows,” he said.

But the price of gold rose sharply in the first three months, leading to exports of goods to lift by 2.9 per cent following a 2.3 per cent rise in the last quarter.

Aussies are holding back on international travel Picture: NewsWire / Dylan Coker

This was the first consecutive growth in exports since the June 2022 quarter.

The March rise was led by non-monetary gold, with more gold being exported and prices continuing to rise from previous highs in the December 2024 quarter.

“The $4.8bn rise in non-monetary gold exports was the highest on record. It was led by $11bn of non-monetary gold exports to the USA, which was larger than the total combined value of non-monetary gold exports to the USA over the past four years,” Mr Lay said.

Without the gold contribution, goods exports would have fallen by 1 per cent in the March quarter.

Separate business indicator data also released by the ABS painted a similar picture with company gross operating profits falling 0.5 per cent for the March quarter on the back of a weaker mining sector.

Company gross operating profits also fell by 6 per cent.

The current account balance also showed exports of services fell 1.7 per cent this quarter, with a 2.8 per cent fall in travel services.

Education-related travel exports also declined in the March quarter.

“Cost-of-living pressures and global uncertainty still appear to be weighing on households’ travel plans, with both exports and imports of travel services declining in the quarter,” Mr Udy said.

Originally published as Further signs Australia’s GDP is set to slump