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Trade surplus narrows as exports drop

Prashant Mehra  |  07 Sep 2017Text size  Decrease  Increase  |  

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SYDNEY - [AAP] Australia's trade surplus has slipped to its lowest level in three months, weighed down by a decline in LNG shipments and lower gold exports.

The trade balance fell to a surplus of $460 million in July, about half of the $888 million surplus in June, seasonally adjusted data from the Australian Bureau of Statistics showed.

Economists had been expecting a surplus of $1 billion in July.

Exports dropped by $709 million, or 2 per cent, primarily due to sharp declines in the value of gold and LNG exports.

Imports were down $281 million, or 1 per cent, on modest falls in capital, consumption and intermediate goods.

Westpac economist Andrew Hanlan said imports were in line with expectations and exports proved to be a disappointment.

"Gold moved lower off a high base, and fuels fell on weaker LNG volumes associated with disruptions," Mr Hanlan said.

"However, expected gains in metal ores and coal failed to materialise, with both recording small declines."

The trade balance has been in surplus for much of the past year, helped by a rebound in iron ore prices and rising natural gas exports.

With production continuing to improve from LNG projects and a bounce in iron ore prices in the past two months, economists expect the momentum to continue.

"Trade surpluses are still likely to last for at least the rest of this year given where commodity prices are and the ongoing ramp up in LNG exports," NAB economist Tapas Strickland said.

"The rebound in coal exports as shown in August port loadings indicates the trade balance should add strongly to third quarter GDP."

 

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