Australia began a sixth year of trade surpluses in January, with economists predicting further gains ahead driven by No.1 trading partner China’s reopening after it jettisoned Covid Zero policies. 

The windfall was A$11.7 billion ($7.9 billion), coming in below’ estimates for a A$12.3 billion gain, Australian Bureau of Statistics data showed Tuesday. Overall exports advanced 1.4%, while imports climbed 4.6% in the month.

Australia has posted monthly trade surpluses since January 2018, underpinned by sales of iron ore and natural gas. The export windfall has bolstered the country’s budget position, with its fiscal outlook among the best in the developed world. Trade was also the key driver of economic growth in the final three months of 2022. 

“We are still getting good prices for most commodities, the Aussie dollar is still reasonably low,” said Benjamin Picton, senior strategist for global economics & markets at Rabobank. “So those are tailwinds for growth.”

He said China’s earlier-than-expected scrapping of Covid curbs is likely to further boost exports, though its new 5% growth target for this year “potentially means a little bit less demand for our commodities.”

A political shift in China to boost domestic consumption rather than export-focused growth model also clouds the outlook, Picton said. 

Today’s report showed the value of metal ores and minerals — which includes iron ore — jumped 12.8% in the month, while other mineral fuels — which covers liquefied natural gas — slid 1.5%.

Imports increased as consumption goods advanced 11.7%, reflecting healthy household demand. Australians have also continued to take advantage of the reopening of borders to head overseas.