Australia’s trade deficit widened in June, as imports rose and exports fell.

The Australian trade deficit stood at A$3.2 billion in June, compared to $2.2 billion in May, the Australian Bureau of Statistics said in a recent report.

The deficit was much wider than analysts' expectations of a deficit of A$2 billion.

The value of exports declined 1% in June following a 1% gain the previous month. Imports rose 2% following a similar increase the previous month.

A decline in the value of resource exports (down 2.7 percent m/m) was the main factor behind the deterioration in the trade balance in June.

Non-monetary gold exports (which are very volatile) were the prime drivers, dropping 15.5 percent m/m.

The 2 percent rise in imports largely reflected stronger imports of consumption goods (+7.4 percent m/m).

Excluding volatile items total goods imports jumped 3.6 percent m/m. The rise in imports may be good news for the domestic economy as a whole as it may reflect higher households’ appetite for consumption.

According to the ABS, the preliminary Q2 trade deficit was $7.98 billion, slightly less than the $8.66 billion deficit in the previous quarter.