Australia’s Trade Balance Declines

Australia’s trade balance shrank more than expected to a four-year low in September, influenced by weaker metal and mineral exports, affected by low demand in China.

The trade balance fell to a surplus of A$4.61 billion ($3.03 billion) in September, as per data from the Australian Bureau of Statistics released on Thursday. This figure was below the forecasted surplus of A$5.24 billion and down from A$5.64 billion the previous month.

This marked Australia’s weakest trade balance since August 2020, primarily due to a continued decrease in exports.

Overall exports decreased by 4.3% month-on-month in September, largely due to declines in metal ores, minerals, coal, and mineral fuels. The reduction was mainly driven by reduced demand from China, Australia’s largest trading partner.

Chinese commodity demand faced challenges amid slowing economic growth, persistent deflation, and a downturn in the property market. However, changes may occur soon as Beijing has recently enacted a significant round of stimulus measures.

In September, Australian imports also fell by 3.1% month-on-month, as domestic demand continued to be affected by high interest rates and ongoing inflation pressures.