(Bloomberg) -- Australia’s trade windfall increased to a new high as prices and volumes of commodities like iron ore surged, boosting the economy as it headed into the late-March coronavirus lockdown.
The surplus spiked to a record A$10.6 billion ($6.8 billion) in March, exceeding economists’ estimates of A$6 billion and up from a downwardly revised A$3.9 billion in February, Australian Bureau of Statistics data showed Thursday. Overseas shipments advanced 15%, the most since September 2000.
“China’s reopening after the February lock-down provided a boost to the trade in goods, exports (+21.6%) and imports (+1.3%),” said Andrew Hanlan, a senior economist at Westpac Banking (NYSE:WBK) Corp. “Key to this was the rebound in iron ore production and export shipments post Cyclone Damien. The lift in the iron ore price in Australian dollar terms was also a plus.”
Hanlan said in a research note that services trade plunged because of the reduction in international travel.
The result is a welcome surprise for an economy shedding jobs and awaiting the economic hit from the coronavirus. Australia has kept shipping commodities to China throughout March and April, which will prevent a complete collapse; still, the central bank estimates that the economy will contract 10% in the first half.
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