What can
our exports buy?

Export prices relative to import prices

Reading the terms of trade

The terms of trade divide the export price index by the import price index and multiply by 100. When export prices rise relative to import prices, the same volume of exports can buy more imports.

This is a relative-price index, not the trade balance, export volumes or the prices paid by every household. It does not show export and import price indexes separately. The ABS reference year is 2023–24 = 100.

Changes help explain why real national income can grow differently from real GDP. They do not tell us how evenly income gains are shared.

Return to national income per person and in total