MNI ANALYSIS: Australia Dec Trade in Deficit As Imports Jump

--In Original Terms, Exceptional Month for Exports

By Sophia Rodrigues

     SYDNEY (MNI) -  - Australia's trade balance posted the biggest deficit in

16 months in December as a sharp rise in imports offset the increase in export.

     The data raises worries about the contribution of net export to Q4 GDP

despite upward revisions in October and November from a deficit to a surplus.

     Data published by the Australian Bureau of Statistics Tuesday show the

trade balance recorded a deficit of A$1.358 billion in December, the biggest

deficit since August 2016. The outcome compared with MNI median forecast for a

surplus of A$100 million and was well outside the range predicted by economists.

     Imports rose due to rise in all three main categories -- consumption,

intermediate and capital goods which rose 5%, 9% and 6% respectively.

     Exports rose due to a 4% rise in non-rural goods which included metal ores

and minerals, coal and coke, and other mineral fuels.

     The sum of seasonally adjusted balances for the three months in Q4 was a

deficit of A$1.13 billion, a turnaround of A$3.4 billion on the surplus in Q3.

However, if seasonal factors used in compiling the quarterly balance of payments

are applied, the preliminary Q4 deficit was A$617 million, a turnaround of A$2.6

billion on the Q3 surplus of A$1.95 billion

     In original terms, December was an exception month for exports as all six

main commodity exports recorded an increase. The increase was mainly due to rise

in volumes for five out of six commodities, with LNG the only one to see a 1%

m/m fall in volumes.

     Below is table on International-trade data for December:

                                      December                         November

-------------------------------------------------------------------------------

                                       (in A$)                          (in A$)

                           Seasonally Adjusted              Seasonally Adjusted

Trade Balance                        +1.358 bl  +36 mln (revised from -628 mln)

MNI Median     +500 mln (range -500M to +700M)

Exports                              32.46 bln                        31.96 bln

Imports                              33.82 bln                        31.92 bln

--MNI Sydney Bureau; tel: +61 2-9716-5467; email: sophia.rodrigues@marketnews.com

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