The trade shortfall shrank to A$957 million ($916 million) from a revised A$2.55 billion in March, the Bureau of Statistics said in Sydney today. The median estimate of 20 economists surveyed by Bloomberg was for a A$1.7 billion deficit.
Rising exports supports the central bank's view that the nation's terms of trade, a measure of income from overseas sales, will surge 20 percent this year, offsetting slower consumer spending. Reserve Bank Governor Glenn Stevens left the benchmark interest rate at a 12-year high of 7.25 percent this week, and signaled he is prepared to raise borrowing costs again if economic growth doesn't slow enough to stem inflation.
Income from exports may keep inflation above the central bank's target range of between 2 percent and 3 percent for longer ``than the Reserve Bank is comfortable with, leading to at least one, but probably two, hikes in the cash rate this year,'' Joiner said.
Exports rose 6 percent to A$20.4 billion in April from March, the most since the government began publishing monthly figures in 1971, and almost double the amount from five years ago.
Coal shipments jumped 23 percent and exports of iron ore rose 2 percent, today's report said. Meat exports increased 11 percent and wheat surged 7 percent.
The Australian dollar traded at 95.48 U.S. cents at 12:20 p.m. in Sydney from 95.66 cents before the report was released. The two-year bond yield rose 1 basis point, or 0.01 percentage point, to 6.87 percent.
The monthly trade balance, which has been in deficit since March 2002, widened to a record A$3.22 billion in February as exporters battled bottlenecks at mines and congestion at ports and railways.
Export constraints in the first quarter, including heavy rain in Queensland state's Bowen coal basis, helped cut economic growth to the slowest pace in almost two years, a report published yesterday showed.
Gross domestic product rose 0.6 percent in the March quarter from 0.7 percent in the previous three months. Australia is the world's largest shipper of coal, iron ore and wool. Exports account for about 20 percent of gross domestic product.
Falling imports, as consumers and companies reign-in spending on imported televisions, cars and machinery, also helped narrow the deficit in April. Shipments into Australia dropped 2 percent to A$21.4 billion from March, today's report showed. Car imports slumped 13 percent and machinery and industrial equipment fell 10 percent.
Business investment unexpectedly fell in the first quarter as companies spent less on machinery and construction, a report last week showed.