RBA: Education export growth will slow

We are used to the Reserve Bank of Australia delivering bad news on interest rates. However recently the RBA also provided an insight into Australia's export of education services.

In a June 2008 Bulletin the Reserve Bank of Australia gave an overview of the current state of the market and offered some predictions.

The key points of interest were:

• 97 per cent of the $12.6 billion of education services exported in 2007 was delivered onshore through foreign students studying in Australia.
  

• In 2007, tuition fees accounted for 39 per cent of overseas student expenditure in Australia, with the balance representing spending by foreign students on goods and services, such as food, accommodation, transport and entertainment.
  

• Since 1982, education services exports have grown at an average annual rate of 14 per cent per annum in volume terms, compared with growth of around 6 per cent both in total services and in total exports over this period.

• Australia’s education exports remain highly dependent on Asia, with nearly 80 per cent of Australia’s overseas students coming from Asia.
  

• Growth in education exports has remained very strong so far this decade, with annual growth averaging 13 per cent over the decade to date. However, a number of factors suggest growth may slow in the period ahead. These include greater competition from within the Asian region, the shift to offshore provision of education services by Australian universities, the higher Australian dollar, and limits on the capacity of Australia’s higher education sector to accommodate further growth in overseas students. However Education exports are expected to outpace aggregate export growth such that their share in Australia’s exports is likely to continue to increase over coming years.

To read the full RBA Bulletin click here.