Australia Unexpectedly Posts Trade Surplus on Weaker Imports
Australia unexpectedly recorded a trade surplus in June as fuel imports declined and shipments abroad stagnated. The local currency rose as a separate report showed stronger retail sales.
Exports outpaced imports by A$9 million ($9.42 million), from a revised A$313 million deficit in May, the Bureau of Statistics said in a report in Sydney today. The median estimate in a Bloomberg News survey of 22 economists was for a deficit of A$375 million. The April balance was revised to a A$20 million surplus from previously reported deficit of A$26 million.
The Australian economy, which has avoided a recession for two decades, is driven by iron ore and coal sales to meet demand in developing nations from India to China. The Reserve Bank of Australia kept its benchmark interest rate unchanged last month after lowering it by 75 points in May and June to 3.5 percent to help shore up demand amid risks to the global economic outlook.
“Weather disruptions have been a significant deterrent to goods exports over the previous few months,” Michael Blythe, chief economist in Sydney at Commonwealth Bank of Australia (CBA), said in a research report before the release. “In June, the trade balance looks to have improved. Imports have moved lower in the month. Export values will be supported by continued strength in volumes of iron ore and coal volumes.”
Exports were little changed at A$26.629 billion, today’s report showed. Imports declined 2 percent to A$26.619 billion on a 20 percent fall in fuel and lubricants, the report showed.
The Australian dollar bought $1.0463 at 11:49 a.m. in Sydney, from $1.0456 before the data were released. The retail sales report showed a 1 percent increase in June, more than than median economists forecast for a 0.7 percent gain.
Powering the Australian economy is the biggest resource boom since prospectors set off a gold rush in the 1850s. The latest bonanza -- for iron ore, coal and natural gas -- is bringing investment projects the government estimates to be worth A$500 billion. The nation’s unemployment rate, at 5.2 percent in June, is lower than 8.2 percent in the U.S. and 11.2 percent in the euro area.
Prices for Australian commodities dropped in July to the lowest level since 2010 as Europe’s debt crisis weighed on demand for resources in Asia.
The commodity price index slid to 95.8 last month from a revised 98.1 in June, the Reserve Bank of Australia said in a statement on its website yesterday. The index declined 10.8 percent in Australian dollar terms over the past year, it said.
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