Fed: Costello says exports restrained by weak world economy

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Fed: Costello says exports restrained by weak world economy

Treasurer PETER COSTELLO says Australian exports have been restrained by drought andthe weak world economy.

But he says a rise in capital goods imports shows strong local business investment.

The Australian Bureau of Statistics says the trade balance widened to $1.87 billionin February, driven by a 10 per cent fall in non-farm exports.

Mr COSTELLO says rural exports are about $500 million lower than mid-2002.

And he says exports of non-rural goods fell in February after a very strong result in January.

He says imports of goods and services also fell in February, but imports of capitalgoods remained strong -- reflecting the strength of domestic business investment spending.

AAP RTV kmh/sb/jmt

KEYWORD: ECONOMY COSTELLO (CANBERRA)