Australia’s Trade Surplus Shrinks Sharply to AUD 2.24B in May, Misses Expectations

Australia’s Trade Surplus Falls to AUD 2.24B in May Amid Declining Exports, Rising Imports

The Australian Bureau of Statistics (ABS) reported on Thursday that Australia’s trade surplus dropped sharply to AUD 2.238 billion in May, missing market expectations of AUD 5.091 billion. This is also down from April’s revised figure of AUD 4.859 billion (previously reported as AUD 5.431 billion).

Exports Slide, Imports Surge

• Exports fell by 2.7% MoM in May, extending the decline from April’s revised -1.7% (initially -2.4%).
• Imports rose 3.8% MoM, up from a previously revised 1.6% gain in April.

The mismatch between shrinking export demand and stronger import activity pushed the trade surplus to its lowest level in months, potentially adding pressure on the Australian Dollar (AUD).

Economic Outlook

A narrowing trade surplus may weigh on GDP growth forecasts and influence RBA policy expectations. Markets will closely monitor subsequent data for signs of trade balance recovery.

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