In a country like Australia, internal spending power must depend to a large extent on the proceeds of exports, In 1938-39 the monthly value of exports has been regularly below the corresponding figure for 1937-38. On the basis of export prices at the beginning of the year, it has been estimated that exports, including newly-mined gold, are likely to total at the most £135,000,- 000, or £19,000,000 less than in 1937- 38, It has been estimated that imports will total £125,000,000, a decline of £14,00000. The realisation of this forecast would give a credit balance of only £10,- 000,000, which would be quite inadequate to meet the cost of Australía's interest payments, since the interest on Government and local authority debt alone amounts to about £27,500,-
000 per annum.
"The Economist" points out that some depletion of the Australian banking system's London funds is certainly to be looked for this year, and says: "In the last resort; if the externe! accounts were to remain seriously unbalanced, the Australian pound might be further depreciated, as an alternative to the stringent internal deflation that would other. wise be necessary; for of all economic specifics deflation is the most unfashionable as well as the most unpopular in Australia.'
Text read from the printed page and cleaned; old type leaves the occasional error.