Australia's run of record trade surpluses looks to be at an end despite strong exports of liquefied natural gas (LNG) and thermal coal, with the trade surplus falling to AUD8.3 billion in August.
The surplus was AUD643 million lower than July - and well shy of market expectations for AUD10 billion - as imports rose 4.5% m/m and exports increased 2.6% m/m, according to the Australian Bureau of Statistics. Steering the surplus lower was an 11.1% m/m increase in fuel imports and a 7.1% m/m rise in consumable imports. The report highlighted a mixed performance from Australia's main commodities exports, with increased LNG and thermal coal exports helping offset weaker exports of iron ore lump and fines.
The Reserve Bank of Australia referenced the important role of commodities by highlighting the boost to national income from the record terms of trade in its statement following the decision to lift interest rates by a smaller-than-expected 25bp to 2.6% on October 4. (See MNI STATE OF PLAY: RBA Taps Brakes, Sees Slower Pace Of Hikes)
The Federal Government revealed in late September a AUD50 billion boost to Budget revenues, with AUD28 billion sourced from higher than forecast commodity prices and income tax collections. The Government will present its Budget on Oct 25.