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Iron Ore January 06, 2015 05:46:19 AM

The trade deficit increases in Australia, but iron ore helps out

Paul Ploumis
ScrapMonster Author
The increase in iron ore exports, has resulted in a small deficit in Australia, or it could be better stated that, smaller than expected, even after the decline in the price of the commodity.
The trade deficit increases in Australia, but iron ore helps out

CANBERRA (Scrap Monster): The trade balance in Australia, increased to a deficit of approximately 925 million dollars in the month of November, which is adjusted to the condition, but eve4n so the achieved result was comparatively smaller than the 2 billion dollars, which was being expected by economists according to the official figures.

The result was announced just after a major study conducted regarding the trade deficit, dated in the month of October, which shown to be reduced to 877 million dollars. This figure has very much helped the Australian dollar to lift itself back above US 81 cents.

Spiros Papadopoulos, the senior economist at the National Australia Bank, stated that, even though the figures in the deficit was better than the expected ones, the deficit has definitely increased since the month of October, when taking account the declining side of the trade in the country.

He also added that, other than the value of the iron ore, the volume of the commodity being shipped is what helped the economy to produce a better result than what was expected by the economists. The economists only considered the declining value of the iron ore, but even so the volume of the commodity was higher than before, and also points out that iron ore contributed to a good part of economic growth the previous year.

The volume of the commodity is still increasing, but it is very much clear that the price of the commodity has also been very much significant. Both the exports and also the imports have hiked about 1 percent in the month of Novemeber, according to the Australian Bureau of Statistics.

Craig James, the Chief Economist of CommSec, stated that, the LNG exports would be helpful to bring forth the surplus in the Australian exports.