NZ posts first trade deficit for December in 4 years, as aircraft inflate imports

Thursday 29th January 2015

New Zealand posted its first trade deficit for a December month in four years as aircraft and mobile phones boosted imports while declining milk powder prices pulled down exports.

The country turned to a $159 million trade deficit in December 2014, from a surplus of $492 million in the year earlier month, Statistics New Zealand said in a statement. The deficit was wider than the $26 million expected in a Reuters poll of economists.

Exports fell 6.9 percent to $4.42 billion in December from the year earlier month, ahead of the $4.21 billion Reuters estimate. Imports advanced 7.6 percent to $4.58 billion, above the $4.24 billion expected.

New Zealand exports in December were pulled lower by declining values for milk products, the nation’s largest export. The value of whole milk powder exports slumped 35 percent even as the volume increased 9.8 percent as higher production and weak demand pushed down global prices.

Meanwhile the value of imports jumped higher, led by a 44 percent increase in capital goods, bolstered by aircraft imports from the US and increased importation of mobile phones.

Excluding the large capital items, imports in December were 2.6 percent ahead of the year earlier month, Statistics NZ said.

New Zealand would have had a trade surplus of $56 million in December had it not been for the aircraft imports, the agency said.

The annual trade deficit widened to $1.15 billion in 2014, from $317 million in 2013.

Annual exports rose 4.3 percent to $50.09 billion, led by milk powder, while imports increased 6 percent to a record $51.24 billion, led by aircraft and parts, the agency said.

China was New Zealand’s largest trading partner in 2014, reflecting its position as the biggest export destination and largest source of imports.

BusinessDesk.co.nz

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