For many months the Reserve Bank of Australia (RBA) has warned that a higher Australian dollar could “complicate” the nation’s economic transition, implying it could make it more difficult for non-mining sectors to flourish should it continue to ratchet higher.
Well, those complications are yet to be seen, at least in Australia’s tourism and education sectors, the largest services exporters in the country.
They’re flying, as shown in this chart from ANZ.
It shows Australia’s net tourism and education trade balance — simply the sum of exports minus imports — on a rolling three-month basis, overlaid against movements in the Australian dollar trade-weighted index. ANZ has inverted the latter, and moved it forward by six months.
It’s in surplus, and growing fast despite recent strength in the Aussie.
In September alone it increased by a further 4%, taking the three-month surplus to over $1.5 billion, the largest seen since the mid-2000s.
While, as yet, there’s been no discernible impact on education and tourism exports from the higher Australian dollar, it will be interesting to see whether the divergence in the chart above continues should the currency continue to strengthen.
Booming short-term international visitor arrivals from China, now the largest source of any nation when Hong Kong citizens are included, may help to explain the break in the relationship seen in recent months.
They totaled 1.4199 million in the year to August, up 21.3% on the levels of a year earlier.