Within today’s data dump of balance of payments data that feeds into tomorrow’s national accounts release for December was the important news that Australia’s terms-of-trade has crashed another 3.1% (seasonally adjusted) and 2.9% (trend) over the quarter to be down by 12.0% (seasonally adjusted) and 11.9% (trend) over the year (see next chart).
As you can see, Australia’s terms-of-trade has dipped well below the GFC low and is now at its lowest level since December 2005; although it remains well above pre-boom historical norms and still has much further to fall.
