Australia’s trade deficit more than halved in December, helped by falls in the price of oil and the value of the Australian dollar.
The trade balance stayed in the red for a ninth consecutive month, with a deficit of $436 million in December, following a deficit of $1.02 billion in November.
Economists had expected a deficit of $875 million in December.
Exports rose 1.0 per cent, while imports were down 1.0 per cent, the Australian Bureau of Statistics said on Tuesday.
CommSec economist Savanth Sebastian said the fall in the Australian dollar helped shrink the deficit.
“While exports to China may have eased, exports to the US and India remain encouraging. Australia’s exports to China held at $90 billion in the year to December, and account for almost 34 per cent of Australia’s total exports,” he said.
“And exports to the US hit a five-year high of $11.25 billion in the year to December.
“No doubt the lift in growth across the super economies coupled with the recent fall in the Australian dollar bodes well for Australia’s longer-term external.”
The prices of oil has halved in the past six months and the Australian dollar has fallen almost 20 US cents.
RBC Capital markets currency strategist Michael Turner said changes in commodity prices are also helping the trade balance from the lower price of oil imports.
“Most of the improvement in the nominal balance has come from lower energy imports, with the stagnant level of exports belying weaker prices but higher volumes,” he said.
“Our expectation is that net exports will have added 0.7 percentage points to fourth quarter headline GDP growth and today’s data leave us comfortable with that.”