Australia trade surplus edges past expectations in October

By Ambar Warrick

Investing.com-- Australia's trade balance was steady in October, data showed on Thursday, as the country’s massive commodity exports weakened slightly while sluggish domestic demand pulled imports a touch lower.

The country’s trade balance ended October at a surplus of A$12.22 billion (A$1= 0.6711), coming slightly above expectations of A$12.10 billion, but falling below the prior month’s reading of A$12.44 billion.

Both exports and imports remained largely steady in October, data from the Australian Bureau of Statistics (ABS) showed, with both metrics falling less than 1% during the month.

Still, cooling economic growth in Asia, which is Australia’s largest export destination for iron ore and coal, saw exports of the two materials dip during October.

But a drop in exports of non-monetary gold, which fell 20.5% to A$1.95 billion in October, were the biggest contributors to the overall decline in exports.

Australian imports also slowed, as rising inflation and interest rates weighed on domestic demand.

Data earlier this week showed that a post-COVID boom in the Australian economy appears to be fading, as third-quarter GDP missed market expectations.

Inflation hit a 32-year high in the third quarter, while the Reserve Bank of Australia (RBA) hiked interest rates by a cumulative 300 basis points in 2022.

During its most recent hike, the RBA warned that Australian economic growth is likely to cool further in the coming months, while inflation is expected to trend higher.

Still, strength in the jobs market and household spending is expected to spur some growth in the Australian economy, even as other facets of the country face increased international headwinds.

An economic slowdown in China, Australia's biggest trading partner, has somewhat dented local growth this year. But the country has benefited greatly from rising natural gas and oil prices, following volatility in global commodity markets due to the Russia-Ukraine war.

The Australian dollar fell 0.1% after the data.

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