After printing a much healthier $1.579 billion deficit in April the ABS reported this morning that Australia’s balance on goods and services blew back out to $2.2 billion in seasonally adjusted terms for the month of May. To make matters worse it appears that April’s deficit has been revised up by $200 million to $1.785 billion.
That’s combination is substantially higher than the $1.5 billion deficit that the Reuters polls of economists were forecasting for May.
That deterioration of $433 million over the revised April total has been driven by an increase of $620 million in imports of goods and services. The ABS said “Intermediate and other merchandise goods rose $385m (5%), capital goods rose $182m (4%) and non-monetary gold rose $124m (29%)”.
On the other side of Austalia’s income and expenditure ledger the increase in exports of goods and services by $188 million went some way to mitigate the increase in imports. The key drivers of the increase in exports the ABS said was a combination of “non-rural goods [which] rose $420m (3%). Non-monetary gold fell $186m (10%) and rural goods fell $77m (2%). Net exports of goods under merchanting remained steady at $28m. Services credits rose $31m (1%)”.