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Last Updated: Tuesday, 2 August 2005, 11:05 GMT 12:05 UK
Australia welcomes export surge
Mine in Australia
Raw mineral producers have helped boost Australia's exports
Australia shipped record exports in the past year but a sharp rise in imports helped to swell its trade deficit.

The surge in global commodity prices boosted Australia's metal and mineral exporters while other industries benefited from China's economic growth.

The total value of exports rose 13% to 162.3bn Australian dollars ($123.9bn, 70.4bn) in the year to June.

But rocketing oil prices and increased investment in machinery by business led to a major increase in imports.

Deficit pressure

The total value of imports rose 12% to A$187.8bn dollars.

As a result, the country's annual trade deficit in the year to June actually increased to A$25.5bn dollars from A$23.8bn the year before.

The size of the deficit has prompted fierce criticism of the Australian government which was re-elected for a fourth term last year.

The worst is past on the trade front but we are not out of the woods yet
Tony Pearson, ANZ Investment Bank

However, trade minister Mark Vaile said the latest figures - which also showed a decline in the deficit on a monthly basis - were encouraging.

Exports of metal ore and minerals rose 33% to more than A$5bn while coal exports increased by 55%.

"Strong growth was recorded in all export sectors," Mr Vaile said.

"The broad distribution of growth across export sectors indicates Australian exporters have responded positively to the challenges of recent years including the higher Australian dollar."

Chinese growth

Australia sold more goods to China, whose economy has been expanding at a breakneck pace, but its deficit with the latter still rose by 27%.

Nevertheless, Australia's trade surplus with Japan - another key trading partner - rose by 106% to A$7.7bn.

Economists have expressed concern that a lack of distribution capacity means Australia is failing to exploit the boom in commodity prices.

But one analyst said the upturn in expenditure by Australian firms should ultimately boost exports.

"The worst is past on the trade front," said Tony Pearson, senior economist at ANZ Investment Bank.

"The impact of the improved commodity prices is coming through, but we are not out of the woods yet in the sense that what we need to see going forward is a pick-up in the volume of exports."




SEE ALSO:
China's boom aids Australia trade
21 Jun 04 |  Business


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