Even though a lot is happening in the Australian economy, finally the Australians have something to cheer about. The country’s monthly trade surplus has witnessed a rise to $3 billion on the back of exports of the resources as well as a decline in the Australian dollar. In the month of September 2018, the imports also witnessed a decline. During the same month, the shipments with respect to the fuels as well as iron ore witnessed the rise of 0.8% in regard to the exports. This trend was well-supported by Australia’s energy as well as mining exporters as they were helped by the elevated commodity prices as well as a fall in the Australian dollar. The economists have reflected the favorable views in regard to the robust momentum in the trade surplus.
The economists have stated that the commodities’ demand from Australia managed to jump the hurdles which were caused by the trade battle between the US and China as well as weaker growth in the Chinese economy. Moreover, the economy was also benefitted from the tourism front which witnessed robust growth momentum thanks to the depreciation of the Australian dollar. However, while the banks have been facing increased regulatory challenges, it can be said that Australia’s export sector have been witnessing a robust momentum on the back of a fall in the Australian dollar, increased commodity prices as well as elevated export volumes. However, the gold, as well as coal exports, witnessed a fall.
The imports have witnessed a decline of $390 million primarily because of the lower purchases of the aircraft. The Australian economy was this time able to impress the global investors as its trade report for the month of September crushed the market expectations. The economists stated that the robust momentum in the exports reflects that Australia’s export sector has learned the tactics to tackle the hurdles posed by the trade battle. The depreciation of the Australian dollar might help the Australian economy to boost the growth of the GDP in the upcoming year. It seems like the headwinds are being tackled by the Australian sectors as Australia and New Zealand Banking Group Limited (ASX: ANZ) had also surprised the market trackers with better results than expectations. The banking sector has been witnessing hurdles because of the lower housing prices as well as increased regulatory conditions.
However, the market players tracking the Australian markets need to be more concerned about the trade talks between the US and China which would happen this month. If the talks didn’t materialize, the Trump administration might go ahead with tariffs which could impact the global growth. As per the report of IMF (International Monetary Fund), if the trade tensions rise, it could pose hurdles for the Australian economy. A decline in Chinese growth could directly impact the Australian economy because the country has trading relations with China. Moreover, the Australian apex bank is expected to adopt quantitative easing or QE.
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