A widening in Australia’s trade deficit during October as exports flatlined won’t have long term implications, an economists says.
Australia’s trade balance stayed in the red in October, with a deficit of $529 million, which was wider than market forecasts of $325 million.
But JP Morgan economist Tom Kennedy says demand for Australian commodities from China and Japan isn’t fading.
“A fairly mediocre result but it’s certainly not disastrous and it certainly doesn’t change our longer term view … in that exports will continue to increase and the demand for imports should continue to slide as the resource boom winds down,” he said.
October’s result followed a deficit of $271 million in September, the Australian Bureau of Statistics said on Thursday.
During that month, exports were flat, while imports were up one per cent.
But coal and iron ore export quantities actually increased.
“It was just more weakness on the price side of things so we’ve still got that big demand from offshore, particularly in China and Japan and we think that demand’s going to continue,” Mr Kennedy said.