Australia's trade surplus narrowed in December by more than economists forecast as coal and metal exports declined, Bloomberg reported.
The surplus shrank to A$589 million ($372 million) from a revised A$979 million in November, the Bureau of Statistics said in Sydney today. The median estimate of 16 economists surveyed by Bloomberg was for A$1.1 billion.
The worsening trade balance adds to evidence Australia is being battered by the slump in global demand for natural resources. Concern the economy has already fallen into its first recession since 1991 will prompt central bank Governor Glenn Stevens to cut borrowing costs later today to the lowest level since the 1960s, economists forecast. Australia's government will also announce today a second stimulus package.
"Australia's recent trade surplus will be fleeting," Alex Joiner, an economist at Australia & New Zealand Banking Group Ltd. in Melbourne, said ahead of today's report. "Import volumes are on the up due to the weaker currency and exports are on the way down" as commodity prices slide.
Exports fell 3 percent to A$25.7 billion in December, the report showed. Coal and metal shipments both slumped 11 percent.
The Australian dollar traded at 63.20 U.S. cents at 11:37 a.m. in Sydney from 63.19 cents before the report was released. The two-year government bond yield rose 1 basis point, or 0.01 percentage point, to 2.35 percent.
Australia's economy may already have followed the U.S., U.K., Japan and Europe into a recession after gross domestic product rose just 0.1 percent in the third quarter, the weakest pace in eight years.