Is Australia set for another economic boom? Australia's $2...

Is Australia set for another economic boom? Australia's $2 billion trade deficit could be wiped out 'within MONTHS because of a coal price surge'

• Australia could be on the verge of another economic boom this year
• Economists claim the price of coal could remove the nation's trade deficit
• Australia's trade deficit currently stands at $2.01 billion for August
• Trade deficit is the difference between a country's imports and exports

By JOSH HANRAHAN FOR DAILY MAIL AUSTRALIA
PUBLISHED: 17:09 +11:00, 6 October 2016 | UPDATED: 18:54 +11:00, 6 October 2016

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Australia may be on the verge of another economic boom thanks largely to an increase in the price of coal.
Economists at leading bank UBS believe the nation's trade deficit - which stands at more than $2 billion - could be wiped away in just the next few months.
However, Australia's trade deficit getting back into the positive is largely dependent on the price of coal, and whether the surge it has made over recent months can continue, Business Insider reports.
The Australian exporting price for coking coal alone has risen 130 per cent over the past three months, with iron ore and thermal coal also on the rise.


If the price of coal continues to increase Australia's trade deficit of more than $2 billion may be eliminated according to economists


'The massive spike in coal prices recently means export values will likely surge across September and October, which will narrow the trade deficit sharply further,' economists believe
Economists at the Australian arm of UBS claim that if export values continue to improve, Australia could be in for a prosperous trade future.
'Overall, the trade deficit continued its improving trend of recent months,' UBS' economists George Tharenou, Scott Haslem and Jim Xu said.
'The massive spike in coal prices recently means export values will likely surge across September and October, which will narrow the trade deficit sharply further.'
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While the economists claim there will be an improvement in the trade deficit, exactly to what level is hard to quantify.
'With coal exports around $2.8b per month – equivalent to a 10 per cent share of total exports – the price spike could potentially be large enough to wipe out the overall trade deficit by itself,' they claim.


The removal of Australia's trade deficit thanks to the price of coal could potentially lead to an economic boom
At $2.01b, Australia's trade deficit for August was its smallest since April.
That deficit is also smaller than the $2.3b forecast for the month by economists.
Exports of goods and services for August reached a total of $26.9b, on par with July's figures.


Read more: http://www.dailymail.co.uk/news/art...-months-price-coal-remains.html#ixzz4ML7pt2Y0
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