"We can say with some confidence that the trade account is likely to be in the black for much of the rest of the year, which is a massive change for Australia," said Brian Redican, a senior economist at Macquarie. "It was only a few months ago we had deficit of A$3 billion."
April's trade balance was revised to show a surplus of A$12 million, from the original deficit of A$957 million. The statistician pencilled in a price rise of 61 percent for iron ore, but emphasized that this was just a first estimate.
Just last week global miner Rio Tinto won price rises of up to 97 percent from China's Baosteel, setting a benchmark for other deals, but BHP Billiton is still in talks.
The price increases will be back dated to April 1 but the true picture will not be clear until all the deals are inked.
Thus while May's trade balance was reported as a deficit of A$965 million, it might not remain that way.
"There's a reasonable likelihood that May's deficit will also be revised closer to a surplus next month as the ABS gathers updated "realized price" information for coal and iron ore exports," said Scott Haslem, chief economist at UBS.
Exports rose 1.5 percent in May, on top of a revised 10 percent increase in April.
Imports rose 6 percent in May, in part because of a A$657 million, or 57 percent, jump in the value of refined petroleum imports as oil prices hit record highs.
Surprisingly imports of consumption goods were also up 8 percent, partly due to a rush of car imports likely aimed at beating a rise in the luxury car tax.
With the price growth of Australia's two biggest export earners, coal and iron ore, outstripping even oil the country was getting a huge boost to its terms of trade -- what it gets for exports compared to what it pays for imports.
The central bank estimates the terms of trade could rise by 20 percent this year alone, the biggest annual gain ever. That in turn would boost incomes across the economy via a windfall to profits, investment, employment and tax receipts.
"It will add substantially to national income and ability to spend, even with the slowing in global growth to below-trend pace that the Bank is assuming," RBA Governor Glenn Stevens said earlier this week after leaving interest rates at a 12-year high of 7.25 percent.
The central bank is concerned this huge boost to incomes will revive domestic demand later this year and add to price pressures at a time when core inflation is already running at 17-year highs.
In this regard the RBA would not have been pleased by retail sales numbers out on Wednesday showing a surprisingly large 0.7 percent rise in May, reported on Wednesday.
Yet, the latest signs suggest the spending splurge did not last. A survey of Australia's services sector out on Thursday showed activity dived in June as high interest rates and record oil prices crimped consumer-related spending.
The Australian Industry (Ai) Group-Commonwealth Bank Performance of Services Index (PSI) fell 4.3 points in June to 45.4, well below the 50 line marking the threshold between expansion and contraction.
"The June readings indicate that the restrictive impact of higher interest rates, rising oil prices and falling business and consumer confidence are weighing heavily on the economy and more than offsetting some of the positives still at work," said Michael Blythe, chief economist at CBA.