©Reuters.
Investing.com — Australia posted a bigger-than-expected trade surplus in December as improved offshore demand for fuels and metals boosted exports, while higher consumer spending over the year-end holiday supported imports.
The country had a surplus of A$10.96 billion in December, data released by the Australian Bureau of Statistics on Monday showed. The surplus was slightly above expectations of A$10.51 billion, but down from November's A$11.44 billion.
December saw a 1.8% month-on-month increase. This was mainly supported by increased shipments of mineral fuels and gold during the month. Colder weather increased demand for liquefied metals, while a slow recovery in manufacturing activity in China stimulated demand for the metal.
Australia's trade balance continued to decline in December from the previous month as exports of key metal ores and coal fell during the month. Exports of consumer goods soared by nearly 10% in the same month on the back of increased holiday demand for consumer goods, and imports rose 4.8% month-on-month.
However, Australia is expected to see a sharp 7.9% decline from November as domestic consumer spending remains relatively weak in the face of high inflation and interest rates.
Australia's trade balance fell to its lowest level in nearly three years in September, but has stabilized in recent months. Slowing economic growth in China, a major export destination, has become a key issue for Australian exporters, particularly as the mainland struggles with a slowing post-COVID-19 economic recovery.
Exports increased in December but remained well below their peak in mid-2022. As the weather warms in many parts of the globe, demand for heating fuels is also limited.
Still, exports of the fuel from Australia are expected to increase due to increased demand for LNG in Europe, especially after the US suspended LNG shipments into the region.
