Will surging coal prices pull Australia out of Budget sink hole?

Surging coal prices comes as a relief for experts who are increasingly worried about Australia’s deteriorating fiscal health. Earleir this week, ratings agency Moody’ fired another warning short with regards to budget malaise.

Greg Gibbs, Director at Amplifying Global FX Capital, “Australian coal producers, especially the steel-making (coking) variety, have benefited from production curbs in China.  Again the outlook is unclear with reports that China is easing those curbs.”

Nevertheless, the budget boost from the recent rise in coking coal prices is $7bn per year assuming the prices stay where they are. Coking coal prices have surged by around 180% this year. The rally is also seen add 2% to national income this year.