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Australia Economy Results In Terms Of Trade, Farming And Foreign Commerce
Australia's trade surplus reached near-record levels at the end of 2016, with nett exports projected to contribute Australia's trade surplus reached near-record levels at the end of 2016, with nett exports projected to contribute 1.1 percentage points to the December-quarter national accounts.In the final three months of 2017, the trade surplus reached $40.9 billion due to an increase in exports and a general reduction in imports.
Australia Terms of Trade
The Australian Bureau of Statistics reported that the terms of trade – the ratio of export prices to import prices – increased by 0.6% in December and remained around record highs due to rising commodity prices.
The statistics supported a rise of $13.4 billion in Australia's current account surplus, which is the difference between the trade surplus and the amount of nett income remitted abroad. In December, the current account surplus was $14.1 billion, which was below the record levels recorded in late 2021 but strong in historical context.
Foreign commerce is anticipated to contribute 1.1 percentage points to the ...
... December quarter GDP growth estimates, which will be reported on Wednesday, due to a 1.1% increase in export volumes and a 4.3% drop in import volumes.
The statistics were consistent with the majority of experts' estimates, with forecasters predicting quarterly GDP growth of 0.7% in December, which would result in the annual pace decreasing from 5.9% to 2.7%.
With the announcement of the trade numbers, NAB lowered its quarterly GDP projection to 0.6%, while ANZ raised its estimate to 1.0%.
The increase in exports was supported by a 20% increase in the export value of travel services, as more overseas students returned to Australia following their exclusion during the first two years of the epidemic.
Despite a decrease of 0.5% in the number of exports, commodity price increases contributed to a 1.9% increase in the export value of products. The value of iron ore sales increased by 6.8%, while metal exports increased by 16.6%.
Public demand grew by 0.4%, indicating a small contribution of 0.1% to GDP growth from government expenditure.In terms of the forecast for interest rates, the national accounts measurements of wages and inflation will be the most significant aspect of Wednesday's publication, according to ANZ senior economist Felicity Emcity.
"Taking into consideration government salaries from today's public finance data, we anticipate the RBA's prefered measure of wider labour costs – non-farm average hourly earnings – to have increased by a moderate 0.6% quarter-on-quarter in the December quarter," she added.
Australian Economy Slowdown Forecast
Analysts and the RBA anticipate a slowdown in the economy this year due to the impact of rising interest rates on consumer expenditure.
After a dramatic 4 percent decline in December, retail consumption increased by 1.9% in January.
Tom Kennedy, an economist at JP Morgan, opined that the December decline was implausibly huge due to probable seasonal adjustment concerns."In this context, the January improvement should also be taken with a grain of salt, and it is probable that month-to-month volatility will remain elevated in subsequent readings," he added.
In light of this, increasing interest rates and declining asset values (i.e. housing) are clear headwinds for consumption, hence a slowdown in retail expenditure relative to the average of the first half of 2022 is anticipated.
Australia is a major agricultural producer and exporter, employing over 325,300 people in agriculture, forestry, and fisheries as of February 2015. Agriculture and its closely connected sectors make $155 billion every year, accounting for 12% of GDP. Farmers and grazers hold 135,997 farms, accounting for 61% of Australia's total land area. GDP from Agriculture in Australia decreased to 14364 AUD Million in the fourth quarter of 2022 from 14742 AUD Million in the third quarter of 2022. Australia's agriculture industry receives extremely little government support in comparison to the 37 member nations of the Organisation for Economic Co-operation and Development (OECD) and other major developing agricultural producers (Greenville 2020). Between 2018 and 2020, the average amount of support (as a proportion of gross farm income) for all nations was 15.1%, with Australia receiving only 2.5%.
Although being primarily desert, farming is an important industry in Australia and farmers need access to finance and loans to ensure their business remains profitable. For those looking to finance their farming and agricultural businesses, Orchard Lending can provide the necessary assistance. We offer farm finance loans Australia wide, including loans for farm properties, agricultural equipment, and other types of agricultural finance.
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