Australia's trade position back in black
Surging coal exports and a fall in oil imports helped Australia's trade balance rebound in August to its second-largest surplus.
The Australian Bureau of Statistics say there was a trade surplus of $1.364 billion in August, seasonally adjusted, a turnaround of $2.06 billion from July's revised $697 million deficit.
The median forecast was for a surplus of $200 million for August.
Only when the Reserve Bank of Australia (RBA) sold two-thirds of its gold holdings for $1.8 billion in 1997 has the country posted a greater monthly trade surplus, in June of that year.
An increase in coal, coke and briquettes exports of $943 million, or 26.4 per cent, during August was the main boost for the surplus, the ABS showed.
ABN Amro chief economist Kieran Davies said price increases in the contracts for commodities boosted Australia's trade balance to post its second surplus in three months.
In June, Australia posted a trade surplus of $365 million.
"The turnaround in the trade balance is showing that the recent surge in coal and iron prices is coming through in the numbers," Mr Davies said.
"It should produce a sharp narrowing in the
current account deficit, although it will still be large because the cost of servicing our foreign debt is so big at the moment."
Overall, exports rise of 6.4 per cent in the month and gained 32.4 per cent from August 2007, the best annual rise in nearly eight years.
Imports declined 2.4 per cent in August.
Australia's net trade balance for the first two months of the 2008/9 financial year was a $531 million surplus, compared to a $3.066 billion deficit in the corresponding period in 2007/8.
Commonwealth Bank of Australia senior economist Michael Workman said net exports would support growth in Australia's gross domestic product (GDP) over the coming year.
"The surplus was a lot higher than expected: it's pretty indicative of what's coming up on the trade side over the next year," Mr Workman said.
"It looks like there's more (export) growth - possibly five to 10 per cent over the next five to six months."
However, ANZ economist Alex Joiner said the global economic downturn would put Australia's trade balance under pressure in 2009.
"At least we have entered the current period of turbulence in relatively good shape," Dr Joiner said.
Fluctuations in the price of oil, falling from its record-high of $US147 a barrel in mid-July helped fuel imports drop by $887 million, or 25 per cent in August.
This was after oil imports hiked $793 million in July.
"We are a net importer of oil nowadays so the fall in the world price of oil has helped us out," Mr Davies said.
Mr Davies said there was unlikely to be anything new ahead for the Reserve Bank of Australia's (RBA) before its monthly board meeting
"I think they (the RBA) would have always assumed that we would see this turnaround, given what's happened to coal and iron prices," he said.
Markets have nearly factored in the central bank lowering the overnight cash rate by half of a
percentage point next Tuesday.