Australia's Trade Turns to Second-Biggest Surplus on Record

Strong demand for coal and iron ore exports has pushed Australia's August trade surplus to the highest in 11 years, highlighting the country's outlook as a beneficiary of Asian growth.The nation's trade surplus grew to $1.36 billion for August, the highest since June of 1997, from a revised deficit of $697 million in July, the Australian Bureau of Statistics said. Analysts had expected only a $200 million surplus.The growing demand for coal and iron ore drove exports up 6% to $24.6 billion in August from $23.1 billion in July, boding well for future exports revenues.Imports slipped 2% to $23.2 billion from $23.8 billion, as global oil prices retreated from their all-time high of US$145 in early July. The trade balance numbers were helped by falling oil prices and a weakening Australian dollar.The Australian dollar has lost 19% against the US dollar since mid-July. The price of a barrel of crude oil has dropped almost a third since hitting a record high of $US145 in mid-July.
China's demand for iron ore is helping Australia's $1 trillion economy outpace other developed nations, which are being buffeted by the global credit squeeze.The economy expanded 2.7% in the second quarter from a year earlier, a report showed last month. That compares with 2.1% growth in the US, 1.5% in the UK and 1.7% in Germany.Australia's terms of trade, a measure of export income, surged 13.1% in the three months through June 30, the most in 35 years, according to a September 3 government report.