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Investing.com-- Australia’s trade surplus narrowed sharply above expectations in May, as weak global demand weighed on exports while imports rebounded from the previous month’s decline.
Trade balance fell to a surplus of A$2.24 billion ($1.47 billion), data from the Australian Bureau of Statistics showed on Thursday. The reading was much softer than expectations of A$5.08 billion and fell sharply from the revised A$4.86 billion surplus in April.
The A$2.24 billion surplus reading was the lowest since November 2019.
The softer print was driven chiefly by a 2.7% month-on-month drop in exports, with decreased shipments of metal ores and minerals during the period. Imports had declined 2.4% in the prior month.
This was, in turn, driven by demand disruptions in Australia’s top trade partner, China, especially after it was slapped with steep U.S. trade tariffs.
The U.S. and China have reached a trade agreement, although recent data showed that signs of economic weakness in China persisted.
A smaller trade deficit also came as Australian imports jumped 3.8% m-o-m in May, driven by strong demand for capital goods.