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Iron ore, coal prices threaten Australian budget revenues – NAB

FXStreet (Barcelona) - The Research Team at National Australia bank note Iron ore and coal prices threatening to take around 1% out of the nominal GDP of Australia by 2015-16.

Key Quotes

“Iron ore exports in 2013-14 currently make up 22.6% of exports of goods and services: a 10% decline in the average price of iron ore for the current financial year would therefore pull down the terms of trade by 2¼% that translates to a 0.6% decline in nominal GDP. That would be a $A3.1bn take by 2015-16.”

“Current Qld met coal spot prices are running at $US113/t while spot iron ore is $US75.5/t, tracking respectively at 16% and 21%. Those levels of met coal and iron ore prices, were they to be sustained, could take another 1% of nominal GDP by 2015-16.”

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