Australia Trade Surplus Halves to A$2.2 Billion on Falling Exports

Australia’s external position weakened in May as the monthly trade surplus shrank to A$2.24 billion, less than half the market consensus of A$5 billion and down from April’s A$5.41 billion, according to preliminary figures. The Australian Bureau of Statistics data show exports fell 2.7% on the month while imports rose 3.8%, reversing April’s 1.1% gain and widening the gap between inbound and outbound shipments. Domestic indicators were also softer than expected. Building approvals climbed 3.2% in May following a 5.7% slide in April, but the rebound was weaker than the 4% economists had projected, and approvals for private-sector houses managed only a 0.5% rise. Retail turnover edged up 0.2%, missing forecasts for a 0.5% gain and suggesting households remain cautious amid elevated borrowing costs. The run of below-forecast releases is likely to reinforce expectations that the Reserve Bank of Australia can keep policy settings steady as it assesses the economy’s response to earlier rate increases and stubbornly high inflation.