Australia's trade deficit improved 15 percent in October as strong global demand for commodities boosted exports and softening consumer demand slowed import growth, economists said Tuesday.
The Australian Bureau of Statistics (ABS) said the trade deficit was a seasonally adjusted 1.33 billion dollars (998 million US) in October, down from 1.56 billion in September and well below market forecasts of 1.5 billion.
The bureau said exports rose 331 million dollars or 2.0 percent to 15.03 billion dollars, while imports edged up 0.6 percent or 99 million dollars to 16.37 billion dollars.
Trade Minister Mark Vaile said exports could reach a record annual level in 2005 if commodity prices continued to rise and efforts to overcome bottlenecks at the nation's ports were successful.
"Strong resources prices have stimulated growth in resources export sectors and with resources firms investing to raise capacity, and robust growth in other sectors, the outlook for exports remains positive," Vaile said.
BT Funds Management senior economic adviser Chris Caton said demand for Australian mineral exports remained strong and could narrow the deficit further.
"The 12 month rolling deficit has clearly turned a corner," Caton said.
"Whmodity prices still to come through on this then the improvement is likely to continue." It is Australia's 45th consecutive monthly trade deficit.
Commonwealth Bank economist Joseph Capurso said the deficit could trend around the one billion dollar mark next year if capacity constraints on exports continued to ease.
"A significant improvement depends on addressing capacity constraints in the mining and transport industries," he said.
Separate data from the ABS showed housing finance rose 2.5 percent to a seasonally adjusted 18.3 billion dollars in October, fuelling expectations a decline in the housing sector has bottomed out.
However, the figure is not expected to convince the Reserve Bank of Australia to lift interest rates when it reveals the results of its monthly monetary policy meeting on Wednesday
The central bank last raised the rate in March, hiking it 25 basis points to 5.5 percent.