Despite the continued slide in commodity prices, rising iron exports have resulted in a trade deficit better than most observers predicted.

Australia’s trade balance widened to a deficit of $925 million in November, seasonally adjusted, but the result was significantly smaller than the $2 billion economists were expecting, official figures on Tuesday showed.

The result came after a major revision to October’s trade deficit, which was reduced to $877 million.

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National Australia Bank senior economist Spiros Papadopoulos said although the figures were better than expected, the deficit had widened since October, reflecting the ongoing deterioration in Australia’s terms of trade.

He said the volume, rather than the value, of iron ore exports, helped produce the better result.

“It’s the same old story where we’ve got deteriorating values but the volume side of things still looks good and is still pointing to a good contribution to economic growth this year,” Mr Papadopoulos said.

“We’re still seeing good volumes growth coming through, but the price impact has obviously been quite significant.”

Exports and imports both rose one per cent in November, the Australian Bureau of Statistics said.

CommSec chief economist Craig James said LNG exports would help Australia’s trade balance get back to surplus in coming years.

“The outlook though is more encouraging because the lift in LNG exports have just commenced and over the next couple of years, they’re going to be adding substantially to our export receipts and that should cause our trade accounts to turn around and get back into the black.”

Mr James said while the result was better than expected, it was the eighth consecutive monthly trade deficit.

“The encouraging aspect is that it didn’t reach some of the more lofty forecasts in the market,” he said.