The chances of a slightly better than expected set of growth figures in tomorrow’s national accounts have risen with a solid balance of payments for the March quarter.

But the figures also show the impact of the dying glory days of the punctured resource boom with a huge, 87% contraction in our quarterly current account deficit.

But the odds are still on a fall in growth of between 0.2% and 0.5%.

Complicating matters was a sharp rise in government spending in the government finance figures for the March quarter, but that was offset by a fall in spending on capital.

The Australian Bureau of Statistics said the seasonally adjusted estimate for the March quarter’s improved balance of payments position “is expected to add 2.2 percentage points to growth in the March quarter 2009 volume measure of GDP.”

The ABS said by its figures, the deficit shrank 87% in the quarter as the country’s iron ore and coal exporters received the last months payments from the record iron ore, coking and thermal coal export prices for the March 31 shipping year.

Iron ore and coal prices have fallen by between 33% and more than 50% since then in contracts (although the Chinese steel mills have yet top settle iron ore prices for the 2010 year).

The ABS said that “the current account deficit, seasonally adjusted, fell $1,743m (or 27%) to $4,614 million in the March quarter 2009.

“The surplus on goods and services increased $900m (22%) to $5,075m. The income deficit decreased $862m (8%) to $9,498m.

“In seasonally adjusted chain volume terms there was a decrease of $5,964m (87%) in the deficit on goods and services. This is expected to add 2.2 percentage points to growth in the March quarter 2009 volume measure of GDP.

But as good as that was there was a significant worsening in Australia’s net international investment position (IIP).

The ABS said the net IIP rose $20.8b to a net liability position of $734.6b in the March quarter 2009.

“Australia’s net foreign debt liability decreased by $21.1b to a liability position of $674.2b. Australia’s net foreign equity liability increased $41.9b to a liability position of $60.5b.”

Meanwhile the impact of the economic slump on Government tax revenues was underlined by the report on Government finances for the March quarter.

The ABS said there was a 11.6% fall in tax revenues for all levels of Government in the quarter to $78.846 billion, while operating balance fell sharply and borrowings grew.

The ABS said key figures for the national accounts, Government Final Consumption expenditure and Gross Fixed Capital Formation for general government and public corporations, both produced contrasting outcomes.

Government final spending rose 0.3%, but Gross fixed capital spending fell 0.6%.

On top of this the RBA said gross fixed capital formation by public corporations fell by 4.8%; total public sector gross fixed capital formation (general government and public corporations combined), fell by 2.5% in the quarter and total public sector spending, including government consumption and public sector capital formation, fell by 0.2%.

Government finance is perhaps the biggest imponderable in the way the growth figures emerge from the ABS.

One point is certain, the surprisingly large 7.2% in corporate profits was far above many estimates (as was the 0.2% drop in wages and salaries in the quarter) and could be very influential in the final outcome.

On balance it looks like a mild bout of negative growth and a recession, but any revisions to September and December figures should be closely watched as well.