Australia terms of trade falls in June qtr

20 Jul 2012, 1:41 pm   -   Source: AAP

Australia's terms of trade, ratio of export prices to import prices, remains in negative territory, dropping 1.3 per cent in the June quarter.

Foreign trade price figures suggest the terms of trade, a key indicator for the Australian economy, have stayed in negative territory.

The terms of trade is the ratio of export prices to import prices.

The figures, released by the Australian Bureau of Statistics (ABS) on Friday, show the import price index rose 2.4 per cent in the June quarter, while the export price index was up 1.0 per cent.

As a result, the implied terms of trade fell 1.3 per cent in the June quarter, following falls in the March and September quarters.

A higher terms of trade is generally seen as boosting national spending power and putting upward pressure on the Australian dollar.

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