SYDNEY, Aug 11: Australia's trade deficit narrowed to 722 million Australian dollars (US$542 million) in June after exports jumped to record levels on strong Asian demand for resources, official data showed on Friday.

The seasonally-adjusted figure from the Australian Bureau of Statistics (ABS) was down significantly on the 2.22 billion dollars May deficit and lower than market forecasts of 1.6 billion dollar.

The figures showed exports surged eight per cent to reach 17.83 billion dollars during the month, while imports fell one percent to 18.55 billion.

Economists said the figures could signal a turnaround in Australia's poor export performance of recent years, caused by inadequate infrastructure in areas such as ports causing bottlenecks and restricting the ability to meet increased global demand.Trade Minister Mark Vaile said it was the highest-ever monthly export figure and brought total exports for the 2005-06 financial year to a record 192 billion dollars.

"All goods export categories increased in June," he said. "Resources exports grew a very strong 15 per cent, in part reflecting increased volumes of iron ore and copper ore exports. Manufactured exports rose eight per cent.

"Resources exports continue to display a very strong upward trend as new capacity comes on stream, notwithstanding volatility in monthly figures reflecting seasonal production and shipping factors.

"Exports are benefiting from strong demand from North Asia, the EU, ASEAN, India and the United States," he added.

Economists said the figures were encouraging but warned the monthly trade figures were volatile and the economy has already seen a number of "false dawns" relating to export performance.

"Today's result was an encouraging sign that the much-anticipated pickup in export volumes has started," ANZ Banking Group economist Riki Polygenis said.

"That said, data on exports and the trade deficit has been oscillating wildly from month to month and we can't rule out the possibility that this month's rise will be unwound."—AFP