Australia’s value of exports for March is expected to have increased significantly, according to Societe Generale. This is likely due to rise in certain commodity prices. Prices of iron ore have remained quite strong after reaching bottom in December 2015. Iron ore prices have risen a total of 35% in the first three months of 2016 in Australian dollar terms. Coal prices have also been increasing, although at a slower rate.
Meanwhile, construction growth in China has expanded strongly and is expected to have underpinned export volumes of iron ore. Moreover, the likelihood of a recovery in exports are also helped by the fact that non-monetary gold exports in February fell 20%, noted Societe Generale.
Australia’s exports are expected to have grown 4% m/m in March, said Societe Generale. Meanwhile, imports have likely broken their five consecutive months of declines. But with the slow growth in private consumption and continued falls in import-intensive resource investment, imports are likely to have grown by just 0.5% m/m. This suggests that trade deficit has narrowed strongly after having widened since Q4 2015, said Societe Generale. Trade deficit has likely reached AUD 2.5 billion, added Societe Generale.
