(Australian Associated Press)
Australia’s trade balance fell into deficit for only the second time in 2017 in December due to a jump in imports.
The trade balance for December weakened to a deficit of $1.36 billion, compared to market expectations of a $200 million surplus.
Deficits originally recorded in October and November have now been revised to small surpluses by the Australian Bureau of Statistics.
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.
The last trade deficit was recorded in April, at $79 million.
The value of exports increased by $510 million in December, or around two per cent, led by an increase in shipments of iron ore and coal, the country’s top two export earners.
However, imports jumped by $1.9 billion, or six per cent, as imports of fuel and machinery and equipment surged.
Fuel and gold imports alone accounted for an increase of around $700 million.
Westpac economist Andrew Hanlan said the spike in imports was surprising as it was relatively broadly based, with consumption goods, capital goods and intermediate goods other than fuel all rising about five per cent.
“Most likely there has been some clustering of import arrivals around the turn of the year, which points to a correction in January,” he said, noting there had been a similar jump in imports in January 2017, with a subsequent drop in the next month.
The trade data was seen as disappointing by economists, who said it suggests softer-than-expected economic growth for the December quarter.
“The fact that the trade balance has deteriorated in the face of rallying commodity prices suggests that net export volumes have been weaker than we had anticipated,” JP Morgan economist Tom Kennedy said.
“The terms of trade inputs are slightly different in the national accounts, but nevertheless suggest some downside risk to our expectation that the external sector would provide a modest boost to GDP in the final quarter of 2017.”