SYDNEY: Australia's trade deficit more than doubled in April from the preceding month to a record A$3.13bil after being hit by the “triple whammy” of SARS (Severe Acute Respiratory Syndrome), drought and a global slowdown.
Trade Minister Mark Vaile said yesterday the strength of the Australian dollar had also contributed to the highest monthly deficit on record, which eclipsed market expectations of about A$2bil and was more than twice as much as the March figure of A$1.48bil.
“It's certainly not good news and nobody's saying it is, but there are good reasons,” Vaile told parliament. “Our exports have been hit by a triple whammy of SARS, drought and a sluggish global economy.”
The figures show imports rose 4% to A$14.37bil while exports dropped 8% to A$11.24bil.
Arab Bank foreign exchange dealer Scott Young described the data as “awful” and said it was likely to weigh on the local dollar.
Vaile acknowledged that the inflated Australian dollar would put pressure on exporters but said they would have to adjust their business plans accordingly.
“Australia is not alone in facing a difficult export environment. Exports from other regional economies have also been negatively affected by global economic developments,” he said.
Vaile downplayed the significance of trade figures. “They reflect a very strong domestic economy and a very weak international economy,” he said.
The fall in the Australian dollar was also attributed to a recovery in the US dollar, sparked by profit taking on the euro by traders expecting the European Central Bank to cut interest rates next week.
Meanwhile, Australian Bureau of Statistics figures showed private new capital expenditure in the three months to March fell a seasonally-adjusted 5.3% quarter-on-quarter to A$13.197bil but was up 18.2% year-on-year.
The consensus of analysts' forecasts was for March quarter capex to fall 5.9% from the December quarter with forecasts ranging from a fall of 10% to a rise of 2%. – Agencies
For more foreign business news click here
Did you find this article insightful?
