Falling commodity prices have kept Australia's trade balance firmly in the red.
The trade deficit was $1.68 billion in June, following a deficit of $2.04 billion in May, figures from the Australian Bureau of Statistics showed.
June's trade balance was better than the $2 billion deficit economists were expecting, with the value of imports down 1.0 per cent in June and exports flat.
But the deficit was the second worst outcome in the past 18 months, after the May data.
Declines in iron ore and coal prices earlier this year were still impacting the trade balance, and would continue to do so in coming months, JP Morgan economist Tom Kennedy said.
"Considering how large coal and iron ore are in terms of Australia's export basket, they're really the dominant factors driving that headline balance lower," Mr Kennedy said.
Commonwealth Bank senior economist John Peters said the persistently high Australian dollar was also weighing on the trade balance.
June's result was the third consecutive trade deficit, following three large surpluses in the March quarter.
He said the trade balance would return to surplus later in the year.
"Stabilising export prices and below trend domestic growth are likely to see the trade balance return to surplus in the second half of 2014," Mr Peters said.
Resource exports to China would continue to dominate Australian trade, he said.
"Goods exports to China accounted for around 38 per cent of total goods exports over the past year and highlight the importance of the Chinese economy to Australia, and vice versa," Mr Peters said.
"But service exports will also be important as the middle class consumers of China and Asia generally expand rapidly in the decades ahead."
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