Investing.com-- Australia’s trade balance shrank more than expected in May, as commodity exports from the country remained weak, while some resilience in local demand saw imports grow steadily.
Trade balance fell to a surplus of A$5.77 billion, data from the Australian Bureau of Statistics showed on Thursday. The reading was weaker than expectations for a surplus of A$6.2 billion, and fell from the A$6.0.3 billion surplus logged in April, which was revised lower on Thursday.
Exports grew 3.9% month-on-month in May after falling sharply in the prior month. But exports of Australia’s key commodities, particularly iron ore and other metals, remained languid as demand from top importer China remained sluggish.
The weaker trade surplus was also driven by stronger imports, which grew 3.9% month-on-month after tumbling 7% in the prior month.
Imports of consumer goods and automobiles were the biggest contributors to the figure, as consumer spending also picked up towards the end of the financial year.
But Australia has been grappling with middling export demand due to weak economic conditions in its biggest export destinations, particularly in Asia and Europe. This trend has kept export growth largely subdued, and has also weighed on the country’s commodity producers.