(Bloomberg) -- Australia’s monthly trade surplus narrowed more than expected in April — while still remaining healthy — as exports of iron ore and other metals declined and imports advanced.
The windfall came in at A$11.2 billion ($7.5 billion), below economists’ forecast of A$13.7 billion, Australian Bureau of Statistics data showed Thursday. Overall exports fell 5%, while imports rose 2% in the month.
Australia has posted monthly trade surpluses since January 2018, underpinned by sales of iron ore and natural gas to the rising economies of the Asia-Pacific region. The export windfall has bolstered the country’s fiscal position, with its budget set to return to surplus for the first time in 15 years.
Demand for Australian goods has been driven by top trading partner China with its strong appetite for iron ore and coal. Shipments of some other commodities such as barley and wine that were banned following a political dispute between Beijing and Canberra are likely to resume in the months ahead as ties thaw.
The improving relationship helped boost trade between Australia and China by nearly 20% between January and May, the Global Times reported, based on data from the country’s General Administration of Customs.
Today’s ABS figures showed the value of shipments to China topped A$100 billion between January and April, compared with A$88.9 billion in the first four months of 2022.
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The data also showed the value of exports of metal ores and minerals — which includes iron ore — tumbled 10.4% in April, while other mineral fuels — which covers liquefied natural gas — gained 1.9%. The falls were exacerbated by a decline in commodity prices.
Travel exports surged 13.8% in April, implying a rebound in tourism and international students that began earlier this year is continuing.
“On that result, the recovery in tourism related exports is all but complete, they climbed to be at A$5.6 billion in April, only A$300 million below the level at the end of 2019, prior to the pandemic,” said Andrew Hanlan, a senior economist at Westpac Banking Corp.
Despite today’s fall in exports, Capital Economics expects net trade to provide a “modest boost” to second-quarter gross domestic product after detracting from growth in the first three months of the year.
Imports increased following a jump in civil aircraft and “confidentialized items” in April, the report showed. Australians have also continued to take advantage of the reopening of borders to head overseas.
--With assistance from Tomoko Sato.
(Adds details on exports to China, economist’s comments.)
©2023 Bloomberg L.P.
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