This gain in real income reflects an improvement both in our terms of trade and in the balance on cross-border investment income. The substantial rise in real commodity prices since the beginning of 2003 and the reduced prices for imported consumer goods from emerging-market economies have resulted in a significant improvement in our terms of trade, and generated large gains in real income.
3 These gains, which are reflected in higher prices for domestic output relative to those for domestic purchases, account for 1.6 percentage points of the 3.6 per cent annual growth in real income since 2002.