Australia’s trade balance shrinks more than expected-ABS
2023.02.07 03:32
Australia’s trade balance shrinks more than expected-ABS
By Tiffany Smith
Budrigannews.com – According to data released on Tuesday, Australia’s trade balance decreased in December more than anticipated. This was primarily due to a decrease in exports of mineral fuels and mining goods, while imports increased slightly due to demand for travel abroad.
The Australian Bureau of Statistics (ABS) released a statement stating that Australia’s surplus decreased to A$12.24 billion (A$1 = $0.6892) from A$13.20 billion the month before. The reading fell short of expectations for a trade surplus of A$12.50 billion. In December, the surplus decreased by 1 percent to A$57.84 billion, largely due to a decrease in metal shipments of 15.4% from the previous month. Additionally, exports of metal ores, coal, and mineral fuels decreased as a result of low local production volumes due to the holiday season and weakening overseas demand.
However, a significant increase in shipments of finished goods, primarily wine and sugar, offset a decrease in mining exports.
According to the ABS, increased demand for travel services contributed to the 1 percent increase in Australian GDP in December to A$45.60 billion. Demand for imports of leisure goods and capital goods both contributed to the rise in this number.
The figures from Tuesday have not yet included a reopening in China, Australia’s largest trading partner. In January, the nation loosened most of its COVID restrictions and reopened its international borders, which is expected to raise commodity demand.
It is anticipated that a resurgence in Chinese tourism to Australia will also contribute to an increase in capital flows to the nation.
High inflation and rising interest rates, on the other hand, are putting an even greater strain on the Australian economy. The is likely to raise interest rates later on Tuesday, with the fourth quarter of 2022 seeing a record-breaking high.
Australia’s key commodity exports are also being dented by weakening global economic trends, and industrial activity is falling in most of the country’s major Asian export destinations.
In anticipation of the central bank, the gained 0.2 percent on Tuesday.
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