By ETHAN Markoff
AUSTRALIA NEWS - Twin natural disasters have paralyzed Australian export and subsequently for the first time in 11 months the country has seen an alarming trade deficit. A recent report shows the trade deficit posted in February at A$205m ($212m; £131m). It is far less expected figure than analysts who were contemplating gain a surplus of close to A$950m.
Meanwhile the Reserve Bank of Australia (RBA) still to change in interest rates and kept it at 4.75%.
Glenn Stevens, governor of the central bank blamed the natural calamity for this slowness. He said the natural disasters over the summer affected the production of coal in flooded mines and took longer than expected.
Earlier in January and February, two main business cities of Australia Queensland and Victoria were badly affected by floods and cyclone. These states are main production places of many rich resources. As a result the production process experienced a quick fall, with export fell by 8%.
However, the Reserve Bank of Australia is hopeful to recover the loss over the next few months. Australia’s exports slid 2% in February to A$22.8bn.
On the other hand imports rose by 5% to A$23bn due to sharp rise in the price of fuels and lubricants. In the last 2 months the country has witnessed a stupendous 26% price rise in fuel and lubricant.
The economy of Australia in the last few years grew robustly and as a result lots of employment and more disposable income were created.
The recent natural disasters have caused a rise in inflation.
Despite trade deficit, the overall economy of Australia is still the best in Asia Pacific region. Increasing demand from other emerging economic countries and global price rise of essential commodity have been helping hands for Australia’s biggest commodity exporters.
"The outlook for trade remains very strong, with high commodity prices underpinning miners' plans for huge investment spending," said Brian Redican of Macquarie.
Seeing the enthusiasm of companies like BHP Billiton who are planning to invest $9.5bn to expand its iron ore and coal operations in Australia, analysts expect Australian companies to invest as much as A$160bn and eventually will give a good impetus to the country’s economy.
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