Australia trade surplus unexpectedly narrows on import strength

Australia’s trade surplus surprisingly narrowed in August as purchases of fuel and lubricants from abroad resulted in stronger-than-expected imports outpacing export gains.

The surplus eased to A$8.3 billion ($5.4 billion) from an upwardly revised A$9 billion in July and well shy of economists’ estimates of A$10 billion, Australian Bureau of Statistics data showed Thursday. Exports advanced 2.6%, while imports jumped 4.5%, it showed.

While Thursday’s result was below expectations, it would come as little surprise to Treasurer Jim Chalmers who has repeatedly warned that the economy can’t rely on high export prices.

Chalmers will unveil his first budget on Oct. 25, when he is expected to map a route to smaller fiscal deficits by curbing spending. The treasurer has dismissed prospects for the books to return to the black over the next four years, highlighting surging costs including a spike in interest payments on pandemic-era debt.

Helping the other side of the ledger is a bonanza from exports of iron ore and natural gas that have helped Australia post monthly trade windfalls since January 2018. 

Today’s report showed the value of coal, coke and briquette exports climbed 2.9%, while iron ore edged down.

The nation is also a major exporter of commodities such as wheat that have also surged. Rural goods climbed 6.8% in August from a month earlier, the report showed.

Services imports -- which cover outbound tourists -- advanced, with spending by Australians traveling abroad climbing 1.2% from a month earlier.