CANBERRA: Australian exports are expected to have increased strongly in December. In the prior month, export values had risen sharply by 8.4 percent. The swing in the trade balance into surplus in the prior month is expected to have continued in December. The main argument is that most of the rise in November reflected robust prices. The RBA’s index of commodity prices shows that the prices have risen equally in December. This shows that the risks to the projection are nearly tilted to the upside.
However, exports of rural goods also rose sharply in November but the RBA showed their prices remained flat in November. On the import front, the gradual strengthening of the trade-weighted exchange rate through 2016 and also in the fourth quarter might have led to some rise in import values. Thus a small gain in import values is expected, noted Societe Generale. “Based on our forecast, export values would have increased by an eye-popping 9.0 percent qoq in 4Q, with imports rising 1.3 percent qoq”, added Societe Generale. Also, this might be the first quarter since the fourth quarter of 2011 that Australia registered a trade surplus. But while it is expected that net exports would being contributing positively to the GDP growth in the fourth quarter, the degree to which it contributes is tough to asses due to the major shifts in prices that have taken place.
