FXstreet.com (Barcelona) - Australia’s trade deficit widened by almost USD $500M in August, to a level of USD $2027M (NAB forecast USD $500M and market forecast USD $670M), the largest deficit since March 2008. July’s deficit was revised to USD $1530M from the originally reported USD $556M – this was the eighth deficit in a row.

According to the NAB Research Team, “The deterioration in the monthly deficit was driven by a -3.0% fall in exports, once again impacted by weak commodity prices” – iron ore and coal prices fell in August, driving a decline in iron ore and copper export values of USD $464M and coal export values of USD $372M.

There was apparently some good news with iron ore volumes increasing in August however, after rising in July, though coal volumes were lower due to large falls in thermal and semi-soft coal exports; although the status of these data are subject to revisions, at times quite large. Looking at the average deficit for the June quarter, it was $737M per month; for the September quarter it is running at $1,779M per month. “This implies a substantial negative contribution to
Q3 GDP from net exports, unless there is a massive turn around the deficit in September, which seems unlikely.” the Team adds.