-Phil O'Donaghoe, Deutsche Bank senior economist
Australia's trade deficit shrank in May, whereas April's record trade gap was revised to be even wider. According to the Australian Bureau of Statistics, the nation's trade shortfall contracted a seasonally adjusted 33% to A$2.75 billion. The figure came after April's trade deficit was upwardly revised to A$4.136 billion, as weakness in export prices of key commodities including iron ore and coal led to deterioration in the nation's trade balance. The improvement in May was driven by both a recovery in exports and decline in imports. Outbound shipments rose 1% to A$25.53 billion in May from A$25.32 billion in the preceding month. Rural goods exports jumped by 4% to A$3.9 billion, the best performance among export goods. Exports to China increased to their highest level since December last year, but are still 7% lower over the year. With the buying power of the were Dollar falling 7% between January and late May, imports plunged 4% to A$28.28 billion from A$29.46bn a month before, owing to 18%, or A$1.07 billion drop in the capital goods category.
Separate ABS data show that short term visitor arrivals increased by 7.2% in the year to April, while short term departures rose by 4.2%. Tourism arrivals are now consistently rising at a stronger rate than resident departures.
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