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Just How Big Will Australia’s LNG Boom be?
Morgan Stanley just came out with a cracker. It reckons Australia could become a global gas superpower in a few years’ time, with LNG exports set to generate a current account surplus for the first time in 40 years.
We don’t doubt that LNG exports are set to increase massively in the years ahead. But to claim it will turn around a 40 year deficit smacks of a PR piece.
Firstly, consider that in 2012/13 Australia’s current account deficit was $54.9 billion, largely consisting of a $17.85 billion trade deficit and a $34.9 billion net income deficit. That’s with an iron ore price and volume boom.
So let’s be generous and say that the LNG export boom will bring us a trade surplus. We say it’s generous because it’s something the iron ore boom, despite all the hype, has been unable to provide.
Read the rest of this article at The Daily Reckoning
