Australia’s trade deficit widened in May for a fifth monthly shortfall as stronger imports of industrial equipment and fuel reflected a mining-investment boom that’s helping sustain economic growth.
Imports outpaced exports by A$285 million ($292 million), from a revised A$26 million deficit in April, the Bureau of Statistics said in a report in Sydney today. It was the longest streak of monthly deficits since a 12-month run ended in 2010. The median estimate in a Bloomberg News survey of 23 economists was for a shortfall of A$500 million.
The data add to pressure on Reserve Bank of Australia Governor Glenn Stevens to extend interest-rate cuts as Europe’s fiscal crisis and slower growth in China threaten the trade that drives the nation’s economy. Stevens kept borrowing costs unchanged this week after lowering the nation’s benchmark by 75 points in May and June to 3.5 percent to aid non-resource industries in the economy.
“Continued signs of slowing in China’s economy could weigh on Australia’s exports in the forward period,” said Celeste Tay, a Singapore-based economist at 4cast Ltd. “Growth in steel production in China has stalled more recently, a headwind for Australia iron ore exports.”
The Australian dollar was little changed after the data, trading at $1.0259 at 12:24 p.m. in Sydney.
Imports advanced 3 percent to a record A$27.1 billion on a 12 percent rise in industrial transport equipment and a 16 percent increase in fuels and lubricants, today’s report showed. Exports climbed 2 percent to A$26.8 billion, the highest since December, led by a 16 percent gain in metals, the report showed.
The value of shipments abroad of coal, Australia’s biggest commodity export after iron ore, were little changed at A$3.6 billion, the report showed. Iron-ore exports rose in May to A$5.5 billion, the most since October, it showed.
China is Australia’s largest trading partner, with exports and imports between the two nations totaling A$11.1 billion in May compared with A$9.7 billion a month earlier, according to the report.
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