Australia's current account gap swells to record level

CANBERRA, Australia (AP) - Australia's current account deficit stretched to a record 11.6 billion Australian dollars (US$7 billion) from the impact of the drought, slow global growth and a high demand for imports, official figures showed Monday. 

The deficit jumped 40 percent in the October-December period from A$8.3 billion (US$5.4 billion) in the previous quarter, the Australian Bureau of Statistics said. 

The current account balance is the difference between Australia's income from foreign sources and payments on foreign obligations.  

It is considered the broadest yardstick of trade, measuring the two-way exchange of goods, services, tourism and investment before adjustment for seasonal factors. 

The result was above the average market expectation of A$10.7 billion (US$6.4 billion) and higher than the previous quarterly record A$9.1 billion (US$5.5 billion) in the three months to June 30, 1999. 

Economists said the blowout was caused by a drought that has devastated major agricultural areas and slashed rural exports, slow global growth that has weakened demand for Australian exports and a strong local economy that has sucked in imports. 

Civil aircraft purchases were a big contributor to the result, rising 147 percent to A$970 million (US$586 million) in the quarter. 

Separately, Australia's net foreign debt climbed to A$354 billion (US$230 billion) in the December quarter from A$327 billion (US$198 billion) in the previous three months. - AP 

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