In February, Australia’s trade deficit widened to AUD 3.4 billion, while January’s deficit was revised to AUD 3.2 billion from AUD 2.9 billion. Over the past year, Australia’s trade deficit was revised a cumulative AUD 2.4 billion wider, 0.15% of GDP. This was nearly because services imports were revised upward. Other services imports, majorly business services imports, and travel services imports were revised mostly. February’s exports value dropped 1.2% m/m. The decline was broad-based, but it was more pronounced in rural exports and volatile non-monetary gold category.
Total value of imports dropped 1.1% m/m, which was largely because of drops in intermediate and other merchandise goods. Core imports, stripping volatile items such as non-monetary gold, fuels and civil aircraft, rose 1.7% m/m, mainly due to consumption goods. Australia’s trade deficit is expected to narrow slightly in the second half of 2016 as export volumes of LNG continue to increase and slightly better commodity prices feed though, according to ANZ.
