Making sense of a trade deficit blowout

A decline in net exports, coupled with soft household and government spending, may suggest the economy is taking a turn for the worse. If China's economy sours, our trade balance could deteriorate further.

Net exports, the main driver of growth during the March quarter, have taken a turn for the worse during April and May. Combined with soft household and government spending and an expected fall in business investment, we cannot discount the possibility that the economy contracted during the June quarter.

Australia’s trade deficit blew out to $1.9 billion in May -- the biggest deficit since January 2013 -- to continue a fairly ordinary quarter for trade. The result missed expectations for a modest deficit of $200 million.

Graph for Making sense of a trade deficit blowout

{{content.question}}

{{ twilioFailed ? 'SMS Code Failed to Send…' : 'SMS Code Sent…' }}

Hi {{ user.FirstName }}

Looks like you've already taken a free trial

Please enter your payment details

We have sent you a code via SMS to {{user.DayPhone}}

please enter this code below to activate your membership

We cannot send you a code via SMS to {{user.DayPhone}}

If you didn't receive SMS code please

SMS code cannot be sent due to: {{ twilioStatus }}

Please select one of the options below:

Looks you are already a member. Please enter your password to proceed

Please untick this box when using a public or shared device


Verify your mobile number to unlock a FREE trial

Please sign up for full access

Updating information

Please wait ...

  • Mastercard
  • Visa
Mastercard

The email address you entered is registered with InvestSMART.

Please login or select "Don't know password"

Please untick this box when using a public or shared device


Register as a new member

(using a different email)

Related Articles