Australia’s Trade Surplus Swells to Record as Export Prices Soar

Chinese import facilitates Australia’s trade boom

While overall, global trade has suffered as a consequence of the COIVD-19 pandemic, recent figures have revealed how Australia’s economy was boosted at the end of March following the rising prices of commodities such as iron ore.

The trade surplus peaked at A$10.6 billion ($6.8 billion), according to recent data released by the Australian Bureau of Statistics in May. The numbers represent a record high in trade for the country.

The record figures are partly due to the 15% increase in international shipments the region has seen, the highest in two decades. China facilitated part of this trade boost as they emerged from lockdown in February. China imports a vast A$63 billion (USD$41 billion) in iron ore from Australia annually. This reliance on Australian products combined with the soaring price of the commodity, alongside the reinstatement of iron ore production in Australia following cyclone Damien at the beginning of the year, helping push Australia to break its trade record this March.

Mediating the impact of COVID-19 on the Australian economy

The staggering impact of the pandemic on the Australian economy has been visible since the beginning of the year. Reports in April revealed that around 70% of hospitality businesses had reduced staff hours, with approximately 43% placing staff on unpaid leave. Other statistics made available in April showed that 6% of people had lost their jobs in the last month, with industries such as accommodation, arts, food, and recreation being the worst hit.

Experts believe that this uptick in international trade will provide welcome relief to the Australian economy due to the detrimental impact the pandemic has already had on it. Even though the country has continued to trade with China from March, estimates from the central bank still estimate that the country’s economy will shrink by 10% in the first half of the year. 

Most recent reports have revealed that Australia has avoided the path towards economic destruction, and there are many signs of recovery, such as improved unemployment predictions and an increase in job postings. It is believed that trade has played a significant part in the country’s success story.

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