Australia's Trade Balance Turns to Surplus


Australia's trade balance turned to a surplus in August as coal exports rose and imports fell.

The trade surplus was A$1.36 billion ($1 billion) compared with a revised deficit of A$697 million in July, the Bureau of Statistics said in Sydney today.

The second trade surplus this year supports the central bank's assessment that exports will help offset falling household spending, which prompted Governor Glenn Stevens to cut borrowing costs last month for the first time in seven years. Exports are being boosted by demand for coal and the currency's 9 percent decline against the U.S. dollar this year.

Exports rose 6 percent to A$24.6 billion in August, today's report showed. Coal shipments surged 26 percent and farm goods gained 4 percent. Iron ore jumped 5 percent.

Imports declined 2 percent to A$23.2 billion. Electrical goods tumbled 23 percent.

China's demand for iron ore is helping Australia's A$1 trillion economy outpace other developed nations, which are being buffeted by the global credit squeeze.

The economy expanded 2.7 percent in the second quarter from a year earlier, a report showed last month. That compares with 2.1 percent growth in the U.S., 1.5 percent in the U.K. and 1.7 percent in Germany.

Australia's terms of trade, a measure of export income, surged 13.1 percent in the three months through June 30, the most in 35 years, according to a Sept. 3 government report.

The trade boom, which has helped push unemployment close to the lowest in more than three decades, is helping offset a slump in consumer spending that has cut imports this year. Household spending dropped 0.1 percent in the second quarter, the first decline since 1993.

BHP Billiton Ltd., the world's largest mining company, in August posted a 30 percent gain in second-half profit.

 


TradingEconomics.com, Bloomberg
10/1/2008 7:16:14 PM