MELBOURNE: Australia's trade deficit blew out to a 14-month high in July as imports spiked four percent and exporters struggled amid the global recession, official data showed Thursday.

The deficit increased more than one billion dollars to 1.56 billion dollars (1.25 billion US), the Australian Bureau of Statistics (ABS) said, almost double economists' forecasts and the worst trade performance since May 2008.

Imports rose 736 million to 21.6 billion dollars, led by a 21 percent increase in fuel and lubricants.

Exports dipped 283 million dollars or one percent to 20.04 billion, with non-monetary gold down 27 percent.

Australia's trade department said the figures showed the global economy continued to weigh on the domestic economy, despite a better-than-expected 0.6 surge in growth over the three months to June.

"Australian exporters continue to face extremely challenging conditions despite some encouraging signs that the world economy is stabilising," it said in a statement.

"Eight of Australia's top ten trading partners have contracted over the last year."

Nomura Australia chief economist Stephen Roberts said the deteriorating trade balance was likely to limit growth in the three months to September.

"Over the next few quarters net exports are likely to detract from GDP growth, with the possibility of a substantial detraction to third quarter (economic) growth," he said. LINK