The Northern Territory (NT) economy is a small open economy influenced by trade, investment and movements in commodity prices and exchange rates. In this section, analysis is provided on the NT's trade balance, trade in goods and services, national and global conditions, exchange rates, as well as key trading partners and commodities relevant to the NT economy.
Key facts | Trade balance | Major trading partners | Goods exports | Goods imports | Service exports | Service imports | National trade | Global economy | Explanatory notes
The NT has a small open economy that is significantly influenced by external factors, such as investment associated with major projects, economic conditions in trading nations, commodity prices and exchange rates. The structure of the economy reflects the NT’s abundant natural resources, strategic defence significance, tourism attractions and relatively large government and community services sector.
National and international economic activity influences the NT economy through changes to exchange rates, commodity prices, population flows, interstate trade volumes, tourism activity and the availability of workers to meet the NT’s labour requirements. Additionally, monetary policy set by the Reserve Bank of Australia influences household consumption, business confidence and investment in the NT.
Major Asian economies, including Japan, China, Taiwan, Singapore, Republic of Korea and Indonesia, are in close proximity to the NT and have significant trade ties that make them some of the NT’s major trading partners. The NT also relies on goods imports from the United States of America and the European Union, which are also identified as key trading partners.
Key facts
- The NT has recorded a trade surplus for over a decade, mainly due to high value exports related to energy and mineral products.
- In 2022-23, the NT had the second highest level of exports as a share of gross state product (GSP), consistent with the other mining states of Western Australia and Queensland, which highlights the resource-intensive nature of the NT economy (Chart 1).
- The NT’s trade balance mainly consists of goods, with service imports contributing 10.1% to total imports and service exports contributing 3.6% to total exports.
A depreciation in the Australian dollar may decrease (increase) demand for service imports (exports) as domestic services become relatively more affordable.
Trade balance 2022-23
- In 2022-23, the NT's trade balance fell by 26.8% to $10.0 billion
(Chart 2). - Net exports of goods decreased by 26.3% to $9.9 billion, reflecting a 25.1% decrease in goods exports, partly offset by a 22.0% decrease in goods imports. A decrease in imports improves the trade balance.
- Net exports of services decreased by 72.0% to $42 million, reflecting a 112.3% increase in service imports, partly offset by a 39.2% increase in service exports (Chart 3).
- The decrease in the value of goods exports to $14.2 billion reflects a decrease in confidential items (down by 18.6%) (Chart 4).
Major trading partners
Goods exports
In the year to January 2024:
- The NT's value of exports decreased by 8.4% to $15.0 billion.
- Japan was the largest export market for the NT (down by $1.0 billion to $6.8 billion), followed by China (excludes SARs and Taiwan) (up by $1.0 billion to $2.9 billion) and Taiwan (up by $78 million to $1.9 billion) (Chart 5).
- Main commodities exported from the NT were confidential items (most likely liquefied natural gas) (64.5%), petroleum and petroleum-related materials (15.5%) and metalliferous ores and metal scrap (7.3%).
Goods imports
In the year to January 2024:
- The NT's value of imports decreased by 5.0% to $2.2 billion.
- The largest import markets were Malaysia (up by $358 million to $531 million), Republic of Korea (down by $446 million to $418 million) and Singapore (up by $163 million to $340 million) (Chart 6).
- Main commodities imported to the NT were petroleum and petroleum-related products (53.7%), road vehicles (13.1%) and confidential items (8.3%).
Service exports
- Increased by 45.1% to $547 million in 2022-23.
- The major components of the NT’s international service exports include personal travel services and government goods and services.
Service imports
- Increased by 110.6% to $478 million in 2022-23.
- The major components of the NT’s international service imports include freight services and personal travel services.
National trade
In the year to January 2024:
- Australia's balance of goods trade decreased by 23.3% to $122.2 billion.
- This reflects a decrease in the value of goods exported (down by 7.3% to $556.3 billion), partly offset by a decrease in the value of goods imported (down by 1.6% to $434.1 billion).
Global economy
- The latest International Monetary Fund (IMF) World Economic Outlook January 2024 Update forecasts global economic growth to be 3.1% in 2024, 0.2 percentage points higher than their October 2023 projection. The upward revision is a result of stronger than expected growth in the United States as well as in several other major economies in the emerging and developing world, together with the provision of fiscal support in China.
- Upside risks to the outlook for the world economy include inflation falling at a faster pace than previously anticipated, gradual withdrawal of fiscal support, China’s economy recovering swiftly, and artificial intelligence boosting productivity.
- While major concerns to the outlook have subsided, the Israel-Palestine conflict has ongoing potential to spread to the wider region, thereby renewing supply-side constraints and in turn causing commodity prices to rise sharply. Major climate events such as El Nino may also have similar effects. If core inflation remains elevated in major economies, the expectation of a greater number of interest rate rises could increase financial stability risks. Additionally, a further fall in real estate investment in China could hamper its domestic growth and prove to be detrimental for trading partners as a result of subdued demand. With many countries having high levels of debt, a steep correction to fiscal spending by raising taxes and reducing expenditure could hinder growth in the near term.
- For more information and analysis on the global economy, visit the IMF website.
- For more information regarding exchange rates and commodity type and prices, see the Reserve Bank of Australia and World Bank websites.
Explanatory notes
- The Australian Bureau of Statistics (ABS) publishes data on the NT’s trade balance annually. This is in line with the GSP expenditure measure.
- International trade statistics are based on monthly data published by the ABS. This release provides preliminary estimates of Australia’s international goods and services on a balance of payments basis, and merchandise import and export statistics on an international merchandise trade basis.
- A large proportion of trade data has been confidentialised by the ABS. Data can be confidentialised by the source if a supplier’s privacy is easily identified, for example, the NT only has one exporter of uranium. Recent changes in classification of confidential items have further increased the proportion of confidentialised NT data.
- International service exports represents income received by local businesses from overseas travelers, foreign businesses, foreign students and foreign government personnel (mostly defence) for services provided including meals, education, accommodation, entertainment and tourism activities. Service imports reflect expenditure by Territorians on services provided overseas. The ABS releases data for the NT’s services trade on a biannual basis, based on the most current financial year and calendar year results.
- The IMF publishes a WEO report biannually, which consists of an analyses by IMF staff economists on global economic developments during the near and medium term. An associated WEO database is released along with the WEO report, which presents the IMF staff’s analysis and forecasts of economic developments at the global level. The IMF also releases quarterly updates on global economic developments. These are not a full WEO report and do not include an update on the analysis and forecasts published in a full WEO report.
- The World Bank releases data on commodities and their prices on a monthly basis.