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Investing.com-- Australia’s trade balance shrank more than expected in April from the prior month as exports were dented by sluggish overseas demand, while imports recovered from a drop in the prior month.
Trade balance fell to a surplus of A$5.41 billion ($3.52 billion), data from the Australian Bureau of Statistics showed on Thursday. The reading was softer than expectations of A$5.96 billion and fell sharply from the A$6.9 billion surplus in March.
The softer surplus was driven chiefly by a 2.4% month-on-month drop in exports, with ABS data showing a drop across the board for Australia’s major commodity exports.
Metal ores and mineral exports shrank 4.7%, while coal, coke, and briquettes slid 16.1% in April.
The softer export figure was largely driven by demand disruptions in top market China, especially after it was slapped with steep U.S. trade tariffs. Some of Australia’s exports to the U.S. were also subject to higher duties, which weighed on demand.
This trend is expected to have improved in May, especially following a tariff deescalation between China and the United States. But recent signs of economic weakness in China could also point to sluggish commodity demand in the country.
A smaller trade deficit also came as Australian imports increased 1.1% m-o-m in April, driven in part by strong consumer demand. Business spending on fixed assets– especially capital goods such as industrial equipment– also contributed to higher imports, which in turn pressured Australia’s trade surplus.