Australia Focus: Deficit drivers

Research evidence excerpt

Australia Focus: Deficit drivers

Tom Ryan Australia Economic Research J P M O R G A N(61-2) 9003-7632 18 June 2026

thomas.f.ryan@jpmorgan.com

Beyond the export price drag, the deterioration across the external sector reflects strong real

import volumes growth. Real imports are up 14% since 2Q22 (the turning point in the trade

balance) around double the growth in GDP and, particularly, faster than relatively flat real

exports. Monthly nominal data show a sharper, more recent acceleration through March and

April (Figure 3). The drivers differ across the two months. March's lift was led by capital

goods, consistent with lumpy procurement tied to domestic data center buildouts, with ADP

equipment (servers and related hardware) up 237% versus March 2025. April's uplift rotated

to intermediate goods and was dominated by higher fuel prices that inflated import values.

Figure 3: Nominal goods imports

Percent change contribution since June 2022

30 +26.0% Consumer goods

24 Capital goods

Intermediate goods

Non-monetary gold

12 Total goods imports

-6

Jun 2022 Jun 2023 Jun 2024 Jun 2025 Jun 2026

Source: ABS, J.P. Morgan

For the National Accounts, the capital goods story carries more weight, with real capital

goods imports up 20.7% since 2Q22. Within this group, ADP equipment volumes are up

107%, and most of this growth has occurred since early 2025 following the spike in tech/data

center-related capex (Figure 4). Intermediate goods volumes have also increased over the

past year, though the lift is more evident in transport-related inputs than fuels. Non-monetary

gold is similarly not a meaningful volume story, with the recent lift in gold import values

having been predominantly price-driven.

Figure 4: Real goods imports

Percent change contribution since 2Q22

15 Consumer goods