The Australian economy

With the bad news always comes a dose of Hopium

Exports drop as trade deficit widens

A fall in coal exports and other mining commodities have increased the trade deficit.

the Age,

7 March, 2013

Australia’s trade deficit widened to $1.057 billion in January from a deficit of $688 million in December, figures released today by the Australian Bureau of Statistics show.

ANZ head of Australian economics Justin Fabo said it was worse than expected.

‘‘It looks like the coal exports numbers and a couple of other things on the non-rural side have come in weaker than expected,’’ he said.

‘‘It’s a bit worse than expected but we think the trade balance will get better through this year, just because of better export volumes.’’

Mr Fabo said it is hard to say but it looks like a slump in coal prices were having a longer lasting effect on exports than anticipated.

He said an improvement in coal prices should help the trade balance in the coming months.

National Australia Bank senior economist Spiros Papadopoulos said the fall in coal exports was due to flooding in Queensland during the month.

‘‘We knew coal exports were going to take a bit of a hit during the month so it was on the cards that we’d get a bit of a deterioration during January,’’ he said.

Mr Papadopoulos said the trade figures were likely to improve during the first few months of 2013.

‘‘We are seeing an improving trend coming through in the trade deficit and in coming months we expect that our exports will continue to improve and we’ll get closer to the zero line,’’ he said.