Australian November Trade Gap Narrows

Australia's trade deficit narrowed in November for the first time in four months as mining companies shipped more iron, copper, lead and uranium., Bloomberg 1/10/2008 6:40:57 AM

The trade gap shrank to A$2.25 billion ($1.98 billion) from a revised A$2.86 billion in October, the Bureau of Statistics said in Sydney today.

A pickup in exports may stoke economic growth, now in its 17th year, and increase pressure on the central bank to raise interest rates to cool inflation being driven by higher wages. Record commodity prices, sparked by demand from China, has spurred miners including Rio Tinto Group to expand production and boost mineral shipments that account for half the nation's exports. Farm exports also have strengthened after heavy rain eased a drought.

Exports climbed 6 percent to A$18.38 billion in November. Shipments of iron ore jumped 7 percent, copper climbed 26 percent and uranium surged 45 percent. Farm exports gained 5 percent. Exports account for about 20 percent of the economy.

Total imports rose 2 percent to A$20.63 billion in November, today's report showed. Imports of vehicles increased 6 percent. Food and drink imports jumped 9 percent, while toys and books surged 7 percent.

Australia's monthly trade balance has been in deficit for almost six years as exporters fought to overcome congestion at mines, ports and railways, and as drought curbed crop production.

An acceleration in exports, which has fueled the longest run of monthly job gains since 1980, may increase pressure on the central bank to raise borrowing costs to stem inflation, already above its 3 percent ceiling.

Australian November Trade Gap Narrows