Australia: Trade surplus will narrow substantially – ANZ

Following the release of January month trade numbers from Australia, analysts at the Australia and New Zealand Banking Group (ANZ) anticipate a substantial drop in trade surplus for the current quarter mainly due to the decline in Chinese travellers as well as Australian’s travelling overseas.

Key quotes

Australia’s trade surplus fell a touch to AUD5.2bn in January but was still above market expectations. A slightly larger fall in exports compared to imports is behind the decline. 

Overall, the weaker AUD over the past two months is likely starting to influence imports. We expect the AUD to stay at these lower levels for the rest of the quarter, so this should keep some downward pressure on imports.

Looking forward to the rest of the quarter, we think the trade surplus will narrow substantially, reflecting the drop in Chinese travellers and our expectation of less international travel more generally, with some offset from fewer Australian’s travelling overseas.