Australia’s Trading Surpluses Stronger On Sixth Consecutive Year

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Economists are optimistic as Australia’s renewed trading relationship with the recently reopened China skyrockets, fueling its consecutive years of trade surpluses. Since 2018, Australia has posted monthly trade surpluses, specifically with iron ore and natural gas.

According to the report in The Business Times, “The windfall was $11.7 billion, coming in below’ estimates for a $12.3 billion gain, Australian Bureau of Statistics data showed on Tuesday, March 7. Overall exports advanced 1.4 per cent, while imports climbed 4.6 per cent in the month.

The report also mentioned that the export windfall strengthened the country’s budget, and experts predict that the country’s fiscal outlook may be the best among other developed countries. Benjamin Picton, the Rabobank senior strategist for global economics and markets, added, “We are still getting good prices for most commodities, the Aussie dollar is still reasonably low, so those are tailwinds for growth.”

Picton added that China’s premature ending of its zero-Covid policy was responsible for pegging the year’s five per cent growth target. However, Picton mentions that the growth target was a bit less, “potentially meaning a little bit less demand for Australian commodities.”

However, Australia and China trade was at 259.7 billion yuan in the first two months of the year. This marks a year-on-year increase of 15.7 per cent. A report published by the Global Times published that “China’s exports to Australia stood at 85.18 billion yuan, a rise of 12.2 per cent; imports from Australia grew by 17.5 per cent or 174.52 billion yuan, customs data reads.”

The report also stated that the most considerable portion of Australian exports to China was its iron ore, at more than 60 per cent. Other bulk commodities like coking coal have experienced a resurgence. With the first export to South China, companies in both countries are showing renewed confidence in each other.

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