Trade deficit widens as exports decrease
Australia’s trade deficit has widened according to the latest figures from the Australian Bureau of Statistics; as the growing strength of the economy fuelled a greater volume of imports, while sluggish activity in advanced markets saw exports slip.
ABS trade figures for July revealed imports surged 3.5 percent in the month, while exports slipped 1.4 percent, taking the July deficit to $1.6 billion.
According to Commsec chief economist Craig James, the Government’s investment tax break contributed to the rise in imports, while poor performing economies such as the US and Europe saw exports slip.
“The trade figures are yet more evidence of our out-performing economy. Consumers and businesses are spending, but a third of the goods are being sourced from abroad,” he said.
“In contrast, export volumes are running on the spot, given the sluggish activity in advanced economies, such as the US and Europe,” he added.
Imports of trucks and computers jumped 29.6 percent and 12.4 percent in July respectively, off the back of the Government’s tax break for business investment, while imports of passenger cars jumped 4.6 percent.
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