Bloomberg reported that Australia's current account deficit widened more than expected in the 3 months through June 2009 as exports of coal, iron ore and farm goods tumbled.

Bureau of Statistics said that the shortfall on goods, services and investment more than doubled from the first quarter to AUD 13.3 billion, the most in a year. The median estimate in a Bloomberg survey of 17 economists was for an AUD 10.7 billion gap.

The statistics bureau said that Mr Glenn Stevens governor of central bank will probably keep the benchmark interest rate at a 49 year low of 3% for a fifth month to spur domestic demand that may be waning as government handouts to consumers end. Net exports subtracted 0.2 percentage points from gross domestic product in the quarter. Exports tumbled 19% to AUD 47.6 billion in the quarter as shipments of rural goods slid 9%, coal slumped 26% and iron ore declined 21%.

Ms Su Lin Ong senior economist at RBC Capital Markets Limited said that "The blowout in the deficit is driven by the global recession and falling coal and iron ore prices. Australia’s economy probably expanded in the second quarter, but only just."

According to a median forecast in a Bloomberg survey of economists, gross domestic product probably expanded 0.6% from the first quarter, when it gained 0.4%. The net income deficit widened to AUD 11.49 billion in the second quarter from AUD 10.43 billion in the previous three months. The goods and services trade balance swung to a deficit of AUD 1.67 billion from an AUD 4.27 billion surplus.

(Sourced from www.bloomberg.net)