Australia's current account deficit widened to a record in the third quarter as the strong Australian dollar, near eight-year highs, made the country's exports more expensive for offshore buyers. Economists said they would downgrade forecasts for third-quarter gross domestic product, due on Wednesday.
The current account deficit widened more than expected to a record and seasonally adjusted A$13.69 billion ($10.78 billion) from A$11.76 billion in the second quarter. Forecasts had centred on a shortfall of A$12.5 billion.
Economists said the deficit equalled 6.5 percent of GDP.
"The Australian economy is having difficulty managing with the Australian dollar at these levels," said Glenn Maguire, chief economist at Societe Generale.
Exports, net of imports, trimmed 0.8 percentage point from GDP in the third quarter, the Australian Bureau of Statistics said. Net exports have not contributed to growth since March, 2001.
"We have that classic squeeze where exports aren't picking up the way they should be and imports are holding at very high levels. So I suspect the big trade and current account deficits will be around for a while," said Michael Blythe, chief economist at Commonwealth Bank of Australia.
The Australian dollar has gained 16 percent in the past 10 weeks, making exports more expensive and bolstering expectations interest rates will be left unchanged for a few more months.
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