Global Biz

Australia trade surplus hits record high in June

(Xinhua)
Updated: 2010-08-04 15:14

CANBERRA - Australia has recorded its biggest-ever monthly trade surplus at 3.5 billion dollars ($3.2 billion) in June, fueled by surging mining exports, new data showed on Wednesday.

The Australian Bureau of Statistics figures showed exports grew seven percent in June, beating a two percent increase in imports.

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The 3.54 billion dollars ($3.2 billion) seasonally adjusted result was almost double the median economist forecast in a Reuters survey of a 1.8 billion dollars ($1.65 billion) surplus.

There has been a massive turnaround in Australia's trade position since March, when trade was showing a deficit of more than 1.5 billion dollars ($1.37 billion), reflecting a sharp rise in coal and iron ore contract prices from April 1.

The acceleration in exports may put pressure on inflation as policy makers determine whether to extend their pause in raising rates.

"Australia is at a point where interest-rate sensitive sectors of the economy seem to be a little bit patchy, but the external sector is very strong," said Riki Polygenis, a senior economist at Australia & New Zealand Banking Group Ltd.

"That means we're going to keep getting very rapid growth in income, which is going to put upward pressure on capacity and perhaps inflation."

The Australian Associated Press said while the mining industry is enjoying the good times, other data showed that business overall has been unsettled by the rapid rise in interest rates earlier in the year and an uncertain global economy.

The Commonwealth Bank-Australian Chamber of Commerce and Industry's (ACCI) business expectations survey released on Wednesday showed that most components of the report declined in the June quarter.

Its business conditions index eased to 53.7 points from 55.4 points in the March quarter, while economic performance expectations fell to 56.4 points from 60.7.

However, both held above the crucial 50-point level that separates growth from contraction.

"Mainstream business is still facing a challenging economic period," ACCI director of economics and industry policy Greg Evans told reporters in Canberra.

The Reserve Bank left the official cash rate unchanged at 4.5 percent for a third straight month after Tuesday's board meeting, having raised it six times between October last year and May.