Australia has adjusted its forecast for earnings from resource and energy exports downwards due to the decline and strengthening of commodity prices, impacting an important source of government revenue. The country now expects earnings to decline by about 10% to A$372 billion ($256 billion) in the year ending June 30, 2025, compared with an estimate of A$380 billion in June. This represents a decline from the A$415 billion recorded last year.
The declining trend in commodity export revenues is expected to continue next year, projected at A$354 billion for the year ending June 30, 2026. The report blames the decline in commodity prices for slow economic growth in developed countries. Higher interest rates, and weak demand from China, an important consumer of steel and other commodities.
The report highlights that iron ore, Australia’s main export, has been hit hard by the slowdown in China’s property sector, with prices falling by almost a third this year. Iron ore export revenues are forecast to fall to A$99 billion in the year ending June 30, 2026, down from A$138 billion the previous year.
Apart from iron ore, prices of other commodities including metals critical to the renewable energy transition such as nickel and lithium also declined. Nickel prices declined due to increased supply from Indonesia, resulting in the closure of some nickel mines in Australia.
At the time of reporting the exchange rate US$1 was equal to 1.4550 Australian dollars.
Reuters contributed to this article.
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