Foreign trade figures showing a boost to exports have added to the case that official data will show an acceleration in the economic growth rate, economists say.
Foreign trade, adjusted for price changes, recorded a narrower deficit in the December quarter, the Australian Bureau of Statistics (ABS) said on Tuesday, with imports rising by 0.7 per cent but exports up by 2.2 per cent.
The figures were contained with the December quarter balance of trade figures that showed a seasonally adjusted current account deficit of $8.374 billion.
The figure had widened from an upwardly revised deficit of $5.824 billion in the September quarter.
The median market forecast was for a deficit of $8.1 billion in the December quarter.
On Wednesday the ABS will deliver the December quarter gross domestic product (GDP) data, which is expected to show economic growth having accelerated from September quarter’s 2.5 per cent annual pace.
ICAP senior economist Adam Carr said on Tuesday that his expectations for GDP were more positive following the balance of payments data.
“The current account deficit came in broader than expected, and that seems to be due to strong imports largely,” he said.
“The impact on GDP, the ABS advise, is to lift GDP about 0.3 of a percentage point.
“I was expecting a small negative, so that’s going to boost GDP.”
Other recent data was also indicative of a robust economy, Mr Carr said.
“Earlier in the week, given the fall in investment, I thought that GDP might be little weak,” he said.
“But it now looks like those concerns were misplaced given the increase in net exports.
“Public spending looks like it will be strong this quarter, given the strength in retail sales and inventories, so it looks like we could have a decent GDP number tomorrow.”
Macquarie Group senior economist Brian Redican said the current account deficit was not too far from expectations.
Mr Redican said the widening of the deficit in the December quarter was due primarily to falling commodity prices.
Mr Redican said the implied contribution to growth from the real-terms (inflation adjusted) trade figures was on the high side of expectations.
“That was, maybe, a touch stronger than expected, so that will support growth a little bit more than was thought previously.
“That’s obviously a small positive there,” Mr Redican said.
“It doesn’t change the overall picture of the economy, but it just does provide a bit more support for growth in the December quarter.”
CommSec chief economist Craig James said the good news was the net foreign debt has eased in the December quarter after a record increase in the previous quarter.
“The trade sector is adding to economic growth this time around rather than detracting from growth.”
Mr James said the trade data would have little effect on December quarter GDP as the annual rate of economic growth was still being affected by last summer’s floods and cyclones that caused a 0.7 percentage point contraction in GDP in the March 2011 quarter.
“Once we get through the next couple of quarters, we should see growth returning to trend,” Mr James said.