Australia’s Trade Balance Update

Australia’s trade balance grew slightly more than expected in June, aided by a steady increase in exports of iron ore and other key commodities, although the trade surplus still remained close to four-year lows.

The trade balance grew to a surplus of A$5.59 billion ($3.66 billion) in June from A$5.05 billion in the prior month, data from the Australian Bureau of Statistics showed on Thursday. The reading was higher than expectations for a surplus of A$5.08 billion.

Exports grew 1.7% month-on-month in June, with the country’s key iron ore, metal ores, and mineral exports all seeing increases.

Imports grew 0.5% due to higher shipments of capital goods, while cooling retail demand led to a drop in consumption goods.

Despite this growth, Australia’s trade surplus remains close to a four-year low hit in March, as sluggish demand from its biggest export destination, China, continues to be a challenge.

Cooling economic growth in China has reduced its appetite for commodity imports, particularly metals and ores, contributing to Australia’s trade balance situation, with China being the country’s largest trading partner.