Recently, the Australian Bureau of Statistics (ABS) revealed the scenario of the balance of trade for the month of September 2016. The key highlights have been given herein below:
Shrinking trade gap: A trade deficit of $ 1.23 billion has been reported in September of 2016 and this indicates a fall of 35 percent from a downwardly revised $ 1.89 billion deficit noted in August. The market expected the same to be about $ 1.70 billion. This has been the smallest trade gap since December 2014 and September has been noted to be the third consecutive month of drop.
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September Figures for International Trade in Goods and Services (Source: Australian Bureau of Statistics)
Rise in exports: Australia witnessed a 2.0 percent rise in exports to $27.25 billion while imports fell 1.0 percent to $ 28.48 billion. Accordingly, the balance of trade averaged $ -579.82 million from 1971 until 2016. An all-time high of $ 2232 million was recorded in February of 2009 while December of 2015 witnessed a record low of $ -4142 million. The value of goods and services exports was noted to jump $ 426 million to $ 27.25 billion in September while the imports of goods and services slipped $ 241 million to $ 28.48 billion. Non-rural goods surged 4 percent while rural goods rose 5 percent in terms of credit. Non-monetary gold fell 19% while net exports of goods under merchanting remained steady. Services credits rose $ 29 million.
Larger perspective: There are expectations that coal prices’ upward movement can further drive improvement in the trade scenario in near future. Over the last three months, the price for coal has moved up. The surge in prices came at the back of cuts in China’s coal supply and this is expected to support the Australian economy. Some boost has also come from positive movement in iron ore prices. Further, RBA’s index of commodity prices has witnessed a rise in October. With the trend of prices continuing like this, Australia might be able to handle the trade deficit appropriately.
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