Trade deficit widens as Jetstar planes bolster June imports

Tuesday 28th July 2009

New Zealand’s trade deficit unexpectedly widened last month, as the arrival of Qantas Airways’ Jetstar unit bolstered imports and exports of dairy products and oil fell.

The nation reported a traded gap of $3.18 billion in the 12 months through June, up from $2.97 billion in the year ended May 31, according to Statistics New Zealand.

A deficit of $2.56 was expected, according to the consensus of estimates compiled by Reuters. Imports rose to $3.62 billion in June, including $571 million of aircraft, while exports weakened to $3.2 billion.

Excluding the aircraft, the trade surplus would have been a weaker-than-expected $154 million, or 4.8% of exports. Stronger export volumes of dairy produce will abate as farmers head into the new season, while imports may remain flat, raising the prospects for the surpluses to dwindle going forward.

“The trade surpluses have been driven by the recovery in dairy production and weakness in import demand due to the recession,” said Jane Turner, economist at ASB. “We do not think the trade surpluses are likely to be sustained throughout the second half of 2009.”

New Zealand’s dollar traded at 64.54 US cents, little changed from before the trade data was released.

Businesswire.co.nz

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