Australia’s Trade Gap More Than Doubles to $1.62 Billion
Imports outpaced exports by A$1.587 billion ($1.6 billion), from a revised A$754 million deficit in February, the Bureau of Statistics said in a report in Sydney today. The gap was the widest since a A$1.595 billion shortfall in October 2009 and exceeded the A$1.3 billion median estimate in a Bloomberg News survey of 20 economists.
The data add to pressure on central bank Governor Glenn Stevens to extend interest-rate cuts as the economy slows and inflation eases, and traders are betting on another cut next month. Stevens last week reduced rates by half a percentage point to a two-year low of 3.75 percent and the central bank revised its export outlook lower in a quarterly statement.
“The global environment is under a fair bit of stress,” said Tom Kennedy, economist at JPMorgan Chase & Co. in Sydney who forecasts another RBA rate cut in August. “At the moment the international story is outweighing the domestic strength in the Australian economy.”
The Australian dollar fell after the report. It bought $1.0175 as of 1:57 p.m. in Sydney from $1.0186 immediately before the figures were released.
Weaker International Demand
Exports rose 2 percent to A$24.5 billion, led by an 8 percent gain in rural goods, today’s report showed. Imports advanced 5 percent to A$26.1 billion on a 20 percent gain in consumption goods, the report showed.
Overseas shipments were affected by weaker international demand and disruptions on the supply side such as industrial disputes in the coal industry, Kennedy said. Imports were in part boosted by purchases of capital equipment by an expanding mining industry, he said.
“You have to look at this from a long-term perspective and how the economy is going to unfold,” he said. “The mining boom is continuing and the capex story is still alive.”
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