Australian Current-Account Deficit Narrows as Iron Ore, Coal Exports Surge

Australia’s current-account deficit narrowed in the three months through June as exports of iron ore and coal surged.

The shortfall on goods, services and investment moved to A$5.64 billion ($5.05 billion) from a revised A$16.5 billion in the first quarter, the Bureau of Statistics said in Sydney today. The median estimate in a Bloomberg News survey of 22 economists was for a A$6.5 billion gap

The current account is the broadest measure of trade because it includes investment flows as well as goods and services shipments. A deficit represents money Australia has to borrow overseas to pay for the goods and services it imports, and to finance investment not covered by local savings.

Net exports added 0.4 percentage point to gross domestic product in the second quarter, the bureau said today.

GDP rose 0.9 percent in the second quarter from the previous three months, when it gained 0.5 percent, according to the median estimate of 23 economists surveyed by Bloomberg News. The figures will be released tomorrow at 11:30 a.m. in Sydney.

The net-income deficit narrowed to A$11.9 billion in the second quarter from A$13 billion in the previous three months, today’s report showed. The goods and services trade balance swung to a surplus of A$6.5 billion from a deficit of A$3.2 billion.

To contact the reporter for this story: Jacob Greber in Sydney at jgreber@bloomberg.net

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