Australia's trade surplus, retail sales gain, stoking optimism downturn will ease

Wednesday 6th May 2009

Australia’s trade surplus widened for the third month in March, while retail sales jumped, stoking optimism the economy, which has skirted the worst of the global downturn, will climb out of recession.

The trade surplus grew to a greater-than-expected A$2.5 billion in March, from A$1.75 billion in February, according to the Australian Bureau of Statistics said in Sydney today. A surplus of A$1.85 billion was expected, according to a Reuters survey. Retail sales rose 2.2% in March from February, more than four times the gain economists had expected. Sales fell 2% in February.

The trade surplus widened as imports slipped 3% to A$22 billion, paced by shipments of machinery, a sign that domestic demand is waning as the economy contracts. Exports trod water, with a value of A$24.6 billion in March, according to the government statistician. Shipments of farm produce gained 10% while coal exports fell 5%.

The better-than-expected data adds to global signs that the downturn is nearing its trough, a situation that prompted Federal Reserve chairman Ben Bernanke to coin the phrase “green shoots” to describe the world economy coming back to life. In Australia, central bank Governor Glenn Stevens yesterday left the benchmark interest rate at a 49-year low of 3%, saying monetary and fiscal policy is now stimulatory.

Stocks have rallied worldwide on signs growth may return. Manufacturing in China grew for the first time in nine months.

The Australian dollar traded at 73.77 U.S. cents, from about 73.90 cents before the data was released.

The March trade surplus was the second-largest on record.

Businesswire.co.nz

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