Sharechat Logo

Deficit still underlines need to save

-press release

Thursday 28th June 2007

Text too small?
Finance Minister Michael Cullen today welcomed the narrowing of the annual current account deficit, but warned New Zealanders still need to save more as the deficit remained large by international standards.

The annual current account deficit for the March quarter was $13.9 billion, 8.5% of GDP, an improvement on the $14.9 billion deficit from the previous year. This was driven largely by an improved trade balance with increasing dairy exports a major factor.

"Some further improvement is expected this year as dairying receipts will grow in line with higher commodity prices," said Cullen.

"However, there is still disturbing evidence about New Zealander's appetite for debt.

"We are continuing to borrow abroad to finance domestic consumption. As a nation we now owe $15 billion more than we did in March last year. New Zealand's net liabilities to the rest of the world now stand at $145 billion.

"Much of this deterioration has been driven by increased borrowing by banks.

"The Labour-led government is doing its bit with prudent fiscal management. Our net lending position stands at $6.5 billion.

"This is a timely reminder that New Zealanders need to save more to reduce our dependence on the savings of foreigners.

"KiwiSaver is officially launched this Sunday. This is the best opportunity in a generation for New Zealanders to build a substantial pool of savings. This will not only provide individuals with financial security in retirement, but will provide more New Zealand capital for local businesses to expand."

  General Finance Advertising    

Comments from our readers

No comments yet

Add your comment:
Your name:
Your email:
Not displayed to the public
Comments to Sharechat go through an approval process. Comments which are defamatory, abusive or in some way deemed inappropriate will not be approved. It is allowable to use some form of non-de-plume for your name, however we recommend real email addresses are used. Comments from free email addresses such as Gmail, Yahoo, Hotmail, etc may not be approved.

Related News:

NZ dollar stalls amid doubts on US-China trade deal
Tourist numbers perk up in August as Aussies more than offset declining Asian demand
Peters to unions: strikes not helpful; no word on Fair Pay Agreements
Oil and gas critical to global emissions reduction effort - BP
Ebos pays A$34m for medical devices businesses
House price inflation ticks higher as sales volumes recover
Fletcher in $31 mln dispute with ministry over Greymouth hospital
NZ dollar eases as markets fret about US-China trade talks
15th October 2019 Morning Report
CTU pressures govt for Fair Pay Agreements

IRG See IRG research reports