Rising commodity prices and exports have handed Australia its largest trade surplus on record in the final month of 2016, pushing the Australian dollar to its highest level in almost three months.
Data from the Australian Bureau of Statistics showed the trade surplus jumped to A$3.51bn ($2.68bn) in seasonally adjusted terms during December, a massive 72 per cent increase from an upwardly revised A$2.04bn (previously A$1.24bn) in November. The surplus came in well ahead of the median estimate of A$2bn, according to a Bloomberg survey.
In nominal terms, December’s result was the largest surplus on record, surpassing the previous peak of A$2.23bn print in February 2009.
Exports of rural goods were up 3 per cent in seasonally adjusted terms to A$4.09bn, while exports of non-rural goods rose 6 per cent to A$20.64bn. In the latter case, a 14 per cent rise in the dollar value of coal, coke and briquettes exports, and a 10 per cent increase in exports of metal ores and minerals drove the gains.
Although the magnitude of the final number will have taken some economists by surprise, the reason behind it was widely expected. Ahead of the release, National Australia Bank, which forecast a A$3bn surplus, said:
There are good reasons to expect a bumper outcome given soaring iron ore and coal loadings at key ports in December, along with the recent moves in commodity prices. With coking coal prices remaining at high levels, it is likely Australia will continue to record trade surpluses for at least the first half of 2017.
At the start of 2016, Australia registered a trade deficit of A$3.438bn.
The dollarydoo received a big boost on the news, rising 0.6 per cent this morning to $0.7628, its highest level in almost three months. This will likely be the fifth straight day of gains for the Australian currency.