Australia Sees Resource Export Earnings Rising Sharply

SYDNEY--Australia's earnings from resources and energy exports are expected to rise by 13% in the current fiscal year, as sharp rises in shipments and a weaker domestic currency offset falls in commodity prices.

The Bureau of Resources and Energy Economics, the Australian government's commodities forecaster, said it expected earnings to reach 199.40 billion Australian dollars (US$182.69 billion) in the year through June, up from A$176.05 billion in the 12 months prior.

It forecast earnings to keep rising by an average of 8% a year over the next five years, to total A$284.42 billion in the year through June, 2019.

"Higher export earnings will be driven by the substantial growth in volumes of a number of commodities despite near- term softness in prices," executive director Bruce Wilson said in the quarterly report.

Substantial growth in iron-ore exports, as companies like Rio Tinto PLC (RIO) continue to expand mining operations in the country's northwest, will help underpin the rise in the next few years, he said.

However, "as new liquefied-natural-gas production capacity comes online over the outlook period, LNG exports will increase to become one of Australia's principal exports and support further growth in export earnings," Mr. Wilson said.

The forecasts paint a more positive picture for Australia's economy, which has been stuck in a low gear as falling commodity prices prompted many mining companies to shelve or scale back new investments. Australia remains heavily dependent on mining, with iron ore and coal its largest exports.

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