SYDNEY: Australia's trade deficit blew out to more than $2 billion in August, data showed yesterday, with exports diving as China's slowdown hit the key mining sector, increasing pressure on the economy.
The Aus$2.027 billion ($2.073 billion) deficit reported by the Australian Bureau of Statistics was triple the Aus$685 million forecast by analysts and reflected a three percent drop in exports driven by sagging resources demand.
It is the worst monthly result since March 2008.
The value of metal ore and mineral shipments fell by seven percent on-month to Aus$6.216 billion, largely in the iron ore and copper sectors, with coal, coke and briquettes down 11 percent to Aus$3.012 billion.
Plunging prices were the primary driver, with the cost of iron ore lump down two percent and iron ore fines down six percent from the previous month. Steelmaking and thermal coal prices each dipped three percent on-month.
It was the third consecutive month of price falls for the major commodities.
The conservative opposition seized on the figures as proof that new taxes on coal and iron ore profits were harming Australia's economic prospects.
But Prime Minister Julia Gillard rejected the claims as "nonsense" and said it was "wrong and inappropriate for anybody to be talking the Australian economy down".
She told reporters: "We came out of the global financial crisis strong — we saved 200,000 jobs, we didn't have a recession, we have an economy... that is expected to grow by about three percent in the coming year.
"We have got a resources boom where we are yet to see the investment peak and the production peak."
Australia's central bank on Tuesday slashed interest rates to their lowest level since the global financial crisis, shaving 25 basis points off the official cash rate to 3.25 percent owing to the softening economic outlook.
The Reserve Bank of Australia noted China's slowdown and said the boom in mining investment in Australia was expected to peak next year, with serious ramifications for the wider economy. China is Australia's top trading partner.
Australia's growth has already cooled, halving from 1.4 percent in the first quarter of 2012 to 0.6 percent in the three months to June.
Its links to resilient Asia helped Australia dodge recession during the financial crisis — the only advanced economy to do so — but analysts have warned that over-reliance on China in particular could now be a liability.
Australia slashed its mining export forecasts for 2012-13 by 10 percent last month, tipping earnings to fall for the first time since the global downturn as prices for coal and iron ore plunge 27-28 percent.
Resources firms including BHP Billiton and Fortescue have recently shelved or scaled back projects in Australia due to worsening industry conditions and mining minister Martin Ferguson has warned the boom days are over.
Australia's trade deficit widens to $2 bn
Australia's trade deficit widens to $2 bn
RLC Global Forum highlights role of Saudi youth in retail digital shift
RIYADH: Saudi Arabia’s young and highly digital population is reshaping how the Kingdom’s retail sector adopts new technologies and artificial intelligence, advancing faster than many global competitors, industry leaders told Arab News.
Speaking on the sidelines of the RLC Global Forum in Riyadh, executives told Arab News that the intersection of a youthful population and strong investment in AI is driving a shift in the industry’s priorities.
From understanding consumer behavior to leveraging the Kingdom’s growing status as a global AI leader, Saudi Arabia is becoming as a unique destination for the retail sector to thrive, learn, and evolve in the digital sphere.
Abdullah Al-Tamimi, CEO of commercial real estate company Hamat Holding, told Arab News that the firm is keen to analyze and understand consumer behavior, with a particular focus on the younger generation as a key part of that insight.
“Actually, it’s a big part of our day-to-day operation,” he said, adding that the company invests heavily in understanding customer needs and behavior and works to correct any missteps.
Al-Tamimi emphasized paying close attention to small details, noting that younger consumers are especially sensitive to the overall experience and “deserve that we work around the clock in order to improve it.”
He added that this focus “can be a competitive advantage for Saudi Arabia as well.”
Al-Tamimi said that as the younger generation grows accustomed to new technology shaping retail customer experiences, Hamat Holding is leveraging AI to enhance them further.
“We started a couple of initiatives improving digitalization,” he said, adding that the company sees digital tools as a way to enhance its work by automating day-to-day operations and allowing teams to focus on bigger-picture and more complex tasks.
While the firm has expanded its use of technology, he stressed it has not replaced human workers, emphasizing the continued importance of human capital for creativity and interaction. “AI is a big part of our strategy,” Al-Tamimi added.
Amit Keswani Manghnani, chief omnichannel and AI officer at luxury goods retailer and distributor Chalhoub Group, told Arab News that bridging a younger customer base with continuous digital development is key to advancing the Kingdom’s retail strategies.
On Saudi Arabia’s demographics, he said: “We look at 2030 as really building products which serve especially the younger population, which is growing and very digitally savvy.”
Manghnani underscored the unique characteristics of the Kingdom’s retail market as a tool for developing effective products and customer experiences.
“So it’s very digitally savvy, much more than in other markets,” he said, noting that e-commerce penetration is rising not only through online purchases but also via digital catalogs that drive in-store visits.
Manghnani said investment is focused on making products more digitally accessible and easier to use, while strengthening customer service to meet the expectations of what he described as a demanding but welcome consumer base. “Service excellence, digital — all these things together are how we are tapping into the younger population, which again is extremely savvy.”
Manghnani reinforced Al-Tamimi’s point that the Kingdom holds a competitive advantage, citing the speed at which its retail and technology industries are aligning.
“As a market, we’re tending to see the adoption of digital,” he said, referring to AI, data and other forms of digital interaction, adding that these tools are increasingly being combined.
He noted that this market is moving “much quicker than the other markets.”
The two-day RLC Global Forum brought together more than 2,000 global leaders, policymakers, and innovators from over 40 countries over the two-day event to define the next chapter of growth across retail, consumer, and lifestyle industries.
