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UPDATE 1-Australia govt splurges to save economy, travel squeeze helps current account surplus

(Adds government spending, background)

SYDNEY, Sept 1 (Reuters) - Australia posted another current account surplus last quarter, helped by strong exports, while government spending jumped in an otherwise dire period which will almost certainly see the economy suffer its worst contraction since the Great Depression.

Data on Tuesday showed the current account surplus was A$17.7 billion ($13.06 billion) in the June quarter from an upwardly revised A$9.02 billion in the prior three-month period and surpassing expectations for a A$13 billion gain.

The data showed exports added a solid 1 percentage point to second quarter gross domestic product (GDP), which is due on Wednesday and is likely to show a record 6.0% contraction as the struggle to contain the coronavirus pandemic shut down whole sectors of the economy.

Resources demand from China helped add A$2.7 billion to goods exports which totalled A$90.6 billion.

But the biggest swing factor was the closure of international borders which meant Australians couldn’t travel overseas, resulting in a 99% decline in travel imports which boosted the current account surplus.

Separate data showed Australian government spending jumped in the June quarter as a host of emergency fiscal programmes were launched to support jobs and activity, adding around 0.6 percentage points to GDP.

Yet that vastly understated the true extent of the stimulus as government expenses, including all the emergency measures, soared by 42% in current dollars to hit A$252 billion.

Australia is now in its first recession in three decades though the hit to GDP is softer than initially thought as the economy re-opened earlier than expected after having curbed the spread of the virus.

The outlook is clouded by diplomatic tensions with top trading partner China after Australia in April called for an international investigation into the source of the coronavirus pandemic.

Beijing has said it was angered by the move, and has since blocked Australian beef imports, placed dumping tariffs on Australian barley, and launched anti-dumping and anti-subsidy investigations into Australian wine. ($1 = 1.3548 Australian dollars) (Reporting by Swati Pandey and Wayne Cole; Editing by Christian Schmollinger and Muralikumar Anantharaman)