Australia’s trade deficit widened to $3.5 billion in December, the country’s fourth worst ever recorded. The ABC:
Seasonally adjusted deficits have ballooned in the past year, with the worst result on record of $4.1 billion being notched up in April, while June’s $3.6 billion result was the third largest on record.
In total, trade deficits increased by $9.5 billion in the three months to December, an increase of 27 per cent on the $7.5 billion worth of deficits chalked up in the three months to September.
The result was driven by a weaker export performance in December – down 5 per cent in value for the month – eclipsing the 1 per cent decline in imports.
The global commodities collapse hasn’t been kind to Australia, and it only looks likely to get worse over the next year as demand for raw materials continues to plummet. It’s true that, unlike emerging markets, Australia’s economy is already pretty well diversified and services make up close to 70 percent of GDP. Still, a lot of the recent growth in the Australian economy has come from mining and agriculture. In recent years, Australia has looked to Asia for business, but those countries’ economies, starting with China’s, are slowing.
Around the world, we’re seeing governments and businesses that spent recent decades building up huge capacity to support heavy industry—from the raw materials to shipping to manufacturing—cope with the reality that the world simply isn’t as ravenous as everyone thought it would be. It’s a sobering development for lots of countries, from Rio to Frankfurt to Sydney.