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CORRECT: NZ current account turns to deficit as drop in services offsets export pickup

Wednesday 14th September 2016

Text too small?

(Corrects first-quarter goods balance to millions in fifth paragraph)

New Zealand’s current account balance turned to a deficit in the second quarter as a drop in services more than offset a pickup in exports.

The deficit was $945 million in the three months ended June 30, from a revised first-quarter surplus of $1.18 billion, Statistics New Zealand said. The annual deficit was $7.4 billion, or 2.9 percent of gross domestic product, from a revised deficit of $7.8 billion, or 3.1 percent, in the year ended March 31. A Reuters survey had forecast a gap amounting to 2.7 percent of GDP.

The biggest quarter movement was in the services balance, which fell to $587 million in the latest quarter from $2.89 billion three months earlier, as services exports dropped to $4.8 billion from $6.9 billion.

That largely reflected a drop in travel to $2.98 billion from $4.8 billion in the first quarter, a period that captures much of the peak season for tourists. Travel exports in both the first and second quarters were ahead of the same periods last year.

In seasonally adjusted terms travel services exports were little changed in the second quarter at $3.48 billion while travel services imports rose to a record $1.4 billion, mainly reflecting increased spending overseas by New Zealand residents.

The goods balance rose to $875 million in actual terms in the latest quarter from $592 million three months earlier as goods exports rose to $13.1 billion from $12.1 billion and goods imports rose to $12.3 billion from $11.5 billion.

The financial account balance fell to $1.49 billion from $1.98 billion. New Zealand investment abroad fell to $933 million from $2.8 billion, while foreign investment in New Zealand declined to $2.4 billion from $4.79 billion.

New Zealand’s net international liability position was $163.3 billion, or 64.9 percent of GDP at June 30, from $159 billion, or 63.9 percent at March 31. Net external debt excluding financial derivatives and equity was $141.6 billion, or 56.3 percent of GDP, up from $141 billion, or 56.7 percent at March 31.




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