Australia’s trade deficit shrank in May as the weaker Australian dollar boosted demand for exports and capped imports. The deficit came in at A$2.75bn from a revised A$4.14bn in April. Economists had forecast a deficit of A$2.23bn.
What’s notable about the April deficit is that the original estimate of A$3.89bn was a record in nominal terms. The revision now makes that deficit even deeper, which means May’s number may be a bit of a relief even though it was worse than expectations. Exports grew a seasonally adjusted 1 per cent to A$25.53bn from A$25.32bn a month earlier. Rural goods exports rose by 4 per cent to $3.9bn, the best rate of growth among export goods.
With the buying power of the Aussie dollar down 7 per cent between January and late May, imports shrank 4 per cent to A$28.28bn in June from A$29.46bn a month before, owing to an 18 per cent, or A$1.07bn drop in the capital goods category.