A spectacular surge in coal and iron ore prices has delivered Australia its biggest trade surplus on record, providing a major boost to the federal budget and spurring hopes that sluggish national income growth will dissipate rapidly in 2017.
The surplus widened in December to $3.51 billion from $2.04 billion in November, the Australian Bureau of Statistics said on Thursday. Economists surveyed by Reuters forecast a deficit of $2.2 billion.
Exports jumped by 5.4 per cent to $32.6 billion in December taking the total gain over the last two years of 2016 to 15.4 per cent - the biggest increase since March 2010.
At the same time imports rose by a modest 1 per cent in the month.
The combined fourth quarter surplus of $4.82 billion represents a turnaround of $8.6 billion on the previous quarter's deficit of $3.77 billion.
A ballooning trade sector all but obliterates prospects that Australia was in a technical recession last quarter, delivering a major relief for the Turnbull government, which has been under pressure over the economy since the September quarter national accounts posted a 0.5 per cent fall in gross domestic product.
The strong result triggered a major surge in the Australian dollar, which jumped to US76.21¢ from around US75.88¢ earlier on Thursday.
Driven by the biggest rebound in the terms of trade since 2009, shipments have rocketed thanks to an unusually benign cyclone season as well as ever rising capacity at mines and ports following the resources investment boom.
Export earnings from iron ore surged 10 per cent to $7.74 billion in December, while coal jumped 14 per cent to $5.87 billion.
Rural exports climbed 3 per cent to $4.09 billion.
