/www.bloomberg.com/ By Victoria Batchelor
Sydney, Nov. 25 (Bloomberg) -- Australia's current account deficit probably widened last quarter as slower global economic growth cut into export earnings at the same time imports of consumer goods and business equipment rose.
The deficit, the broadest measure of trade because it includes investment, probably widened to A$7.8 billion ($4.4 billion) in the third quarter, according to the median of 21 forecasts in a Bloomberg News survey. The report will be released Friday at 11:30 a.m., Sydney time.
The shortfall represents money Australia has to borrow overseas to finance investment not covered by savings. A rising deficit may weigh on the Australia dollar, which traded at 56.39 U.S. cents at 11:50 a.m. in Sydney.
``We could get a pretty ugly number and that might put a bit of pressure on the currency,'' said Su-Lin Ong, senior economist at RBC Capital Markets. ``The current account deficit will get wider because of the worsening trade position.''
The third-quarter current account shortfall is expected to have widened to about 4.25 percent of gross domestic product, according to the Bloomberg survey. The deficit was A$7.47 billion in the second quarter, or 4.1 percent of GDP.
Australia is the world's biggest exporter of beef and wool, and second-largest of wheat and sugar. The nation exports about one-fifth of total output of goods and services.
Drought, Global Slowdown
``The first evidence of the drought's impact on rural production, weak tourism inflows and soft global demand will combine to'' weigh on exports in the quarter, said Westpac Banking Corp. in its weekly economic report.
An El Nino-induced drought has spread across more than one-third of Australia, cutting production of export crops such as wheat.
The report is expected to show the change in the overseas trade balance, or so-called net exports, probably subtracted 0.1 percentage point from economic growth in the third quarter, according to the Bloomberg News survey.
The third-quarter economic growth report, to be released on Dec. 4, is expected to show the economy grew 0.9 percent from the second quarter and about 3.5 percent from the same period a year ago. Stronger consumer spending, construction and business investment on new equipment is fueling growth.