Australia’s commodity export earnings are set to contract over the next couple of years as the prices of iron ore, liquefied natural gas and coal slump, according to government forecasts.
Fewer supply disruptions and “relatively soft” global economic growth, together with an expected strengthening in the Australian dollar, will push down revenue, the Department of Industry, Science and Resources said in a quarterly report released Monday. However, the outlook for China has improved in recent months and concerns about a hard landing in the US have eased, it said.
Energy and resources exports will fall to $408 billion in the year through June 2024, down 12% from a record high in the previous year, the department forecast. There will be a sharper slowdown the following year, to $348 billion in 2024-25, it said.
Australia’s mining sector — which accounts for more than 13% of the country’s gross domestic product — was a beneficiary of the surge in commodities prices following Russia’s invasion of Ukraine, but that supply-shock driven boom has now worn off. While the importance of traditional export mainstays like iron ore and coal is expected to diminish over time, Australia aims to boost production of minerals vital to the energy transition including lithium, nickel and copper.
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