Outbreak of Coronavirus have started to effect on the Australian economy

5 Mar 2020 05:02 PM

Australia's trade surplus narrowed in the first months of the year, with the outbreak of the Coronavirus and declining exports by China, which is Australia's largest trading partner. The trade surplus declined from 5.38 billion to 5.21 billion, or about 3%, but it exceeded expectations, which indicated A$4.80 billion.

Exports fell by 3% to A$40.12 billion and the most important exports performed as follows:

Non-cash gold exports fell by 34% to 735 million.

Exports of non-rural commodities fell 3% to 714 million.

Merchandise exports fell to 8 million.

Rural exports declined by 6% to 236 million.

Credit commodities fell 1% to 54 million.

On the other hand, imports in Australia decreased by 3%, bringing the total to A$34.911 million. The performance of the most important imports was as follows:

Capital goods fell 10% to 640 million.

Commercial goods fell 4% to 466 million.

Consumer goods fell to 19 million.

Non-monetary goods fell 60% to 225 million.

Service imports fell 1% to 101 million.

The worst affected by the outbreak of the Coruna Virus was food sector, as most seafood exports went to China. With demand from China in general declining by 50%, seafood prices have declined sharply, which has affected the performance of Australian exports, which may continue in the coming months.

The data today comes after RBA announced on Tuesday morning the decision to cut interest by 25 basis points from 0.75% to 0.50% as a precautionary measure to address the risks of an outbreak of the Coronavirus.

With the implications of the virus outbreak beginning to appear on economic data figures as we saw today, the Australian economy is expected to be severely affected in the coming period with almost complete cessation of business activity in China, which sits on the throne of the largest trading partners as mentioned earlier.

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