Australia's Trade Deficit Widens in March

Australia’s trade deficit widened in March for a third month as exports of coal fell and oil imports rose, a sign domestic demand continues to spur the economy., Bloomberg 5/8/2010 7:35:53 PM

The shortfall swelled to A$2.08 billion ($1.88 billion) from a revised A$1.7 billion in February, the Bureau of Statistics said in a report in Sydney.

Australia’s widening trade gap suggests robust domestic demand and investment are stoking imports, underscoring the central bank’s view that the nation’s economy is expanding at or close to trend. Governor Glenn Stevens increased the benchmark lending rate this week by a quarter point to 4.5 percent, the sixth move in seven months.

Imports rose 3 percent in March to A$22.5 billion. Gasoline imports jumped 13 percent and imports of capital goods including industrial transport equipment increased 2 percent.

Exports gained 2 percent to A$20.4 billion. While rural shipments rose 2 percent, exports of coal slumped 14 percent.

Increasing demand from Asia is stoking an investment boom in Australia’s resources industries that is forecast by the central bank to last more than a decade.

Business investment surged 21 percent in the first quarter from a year earlier as companies including Woodside Petroleum Ltd. expand liquefied natural gas projects in Western Australia.

Projects valued at A$267 billion were committed to or in progress as of March 31, up A$46 billion from a year earlier, Canberra-based research company Access Economics said today.