Australian August trade deficit expected to narrow

Australian August trade deficit expected to narrow

Australia's trade deficit is expected to narrow in August as imports declined and demand from China boosted exports earnings. Economists said the trade deficit will probably narrow to A$2 billion from A$2.75 billion recorded in July. The Australian Bureau of Statistics (ABS) will release the balance on goods and services for August on Wednesday. Commonwealth Bank economist Bea Deda forecasts that the trade deficit will decline to A$1.9 billion in August due to the large drop in imports and a recovery in exports. Global economic growth and China's strong demand are the determining causes of the increase in exports. Australia is the world's largest exporter of coal, iron ore and wool. These commodities account for about 60% of total exports. Stronger demand from China and other nations is boosting exporters' earnings. Last month, Australia's largest steel producer BlueScope Steel Ltd. posted a 70% rise in second half profit after steel prices surged because of increased demand from the US and China.