Australia

Article by Bloomberg Markets Economics Asia Edition

Key points

  • Exports driven by metals, gold and grain; imports by travel
  • New Treasurer likely to welcome boost to tax from commodities

Australia’s trade surplus hit a fresh record high, driven by strong prices of key exports from grains to metals and gold, in a result that’s likely to boost second-quarter gross domestic product.

The surplus swelled to A$17.7 billion ($12.3 billion) in June, surpassing economists’ estimate of A$14 billion, Australian Bureau of Statistics data showed on Thursday. Exports jumped 5%, while imports rose 1% as more Australian holidaymakers travelled overseas.

“We estimate that net exports provided a boost to second-quarter GDP growth of a large 1 percentage point, which supports our view that Australia’s economy is holding up better than most anticipate,” said Marcel Thieliant, a senior economist at Capital Economics.

Australia has posted monthly trade windfalls for 4-1/2 years, underpinned by sales of iron ore and coal. It’s also a key exporter of LNG and has benefited from surging prices for the fuel, along with commodities like wheat amid fears of supply disruptions from Russia’s war on Ukraine.

Thursday’s data showed earnings from metals jumped 27% in June while cereal and grains climbed 21.1%. Australians travelling overseas boosted services imports by A$2 billion from an upwardly revised A$1.6 billion in May.

The figures will be welcomed by new Treasurer Jim Chalmers, who is struggling to contain a budget deficit and rising government debt after a fiscal stimulus to support the economy through the pandemic. Chalmers will release his first budget in October. 

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Article first published by Bloomberg – Are you a robot?. on 4 August 2022 at https://www.bloomberg.com/news/articles/2022-08-04/australia-s-trade-surplus-swells-to-fresh-record-in-boost-to-gdp