Sharechat Logo

NZ annual current account gap widens as imports rise, foreigners reap profits

Wednesday 18th December 2013

Text too small?

New Zealand's annual current account deficit widened to a four-year high as a reviving economy took in more imports and foreigners continued to reap greater profits here than kiwi firms garnered abroad.

The current account gap widened to $8.8 billion, or 4.1 percent of gross domestic product, in the year ended Sept. 30, according to Statistics New Zealand. The actual deficit in the latest quarter widened to $4.78 billion from a revised $1.3 billion three months earlier. A quarterly gap of $4.3 billion and an annual deficit of $8.83 billion, or 4.1 percent of GDP, were forecast in a Reuters survey.

Today's release is the first to incorporate revised statistics that include an improved surveying of spending by international visitors and students and an estimate of imports of goods below NZ Customs' $1,000 threshold. The government statistician said goods under $1,000 have become more important as kiwis buy more via the internet from overseas.

The data improvements lowered the current account gap as a percentage of GDP to an average 4.8 percent over the past 10 years from 5.6 percent, the department said.

In the third quarter, the balance on goods turned to a deficit of $1.8 billion from a surplus of $1.1 billion three months earlier. This was mainly driven by a jump in imports to $12.9 billion, a record for the series, from $11 billion, while exports fell to $11 billion from $12 billion.

The balance on income had the biggest negative impact on the current account gap, at a deficit of $2.2 billion, little changed from the third quarter. The income outflow was $3.9 billion, up from $3.77 billion in the second quarter, while the inflow improved to $1.7 billion from $1.5 billion.

The balance on services was a deficit of $581 million from a revised gap of just $7 million three months earlier. The balance on current transfers was a deficit of $149 million.

The nation's financial account showed a net investment outflow of $507 million in the third quarter as non-residents withdrew $1.8 billion of investments from New Zealand, outpacing a $1.3 billion withdrawal of New Zealand investments abroad.

Net international debt fell by $2.6 billion to $145.6 billion at Sept. 30 compared to June 30, as a $9.2 billion decline in borrowing was partly offset by a $7.1 billion fall in lending. Some $9.2 billion of the decline in borrowing related to banking sector borrowing.

Banking sector international debt was $101.6 billion, the lowest since March 2007.

The net international equity position at Sept. 30 was -$4.5 billion, the lowest position since the fourth quarter of 2005.

Bond Offer: Infratil Ltd, 7.2 year & 10.2 year unsecured unsubordinated bond

  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 mixed, buffeted by Fed talk and downunder data
Super Fund can expect lower returns over next decade - review
ANALYSIS: Should penalties for continuous disclosure breaches be relaxed?
Fletcher seeks urgent talks on Ihumatao stalemate
NZ economy grows 0.5% in June quarter, beating expectations
Restaurant Brands lifts 2Q sales; appetite for KFC offsets ditched Starbucks
Auckland jet fuel arrangements a potential barrier to new entrants
NZ dollar weaker after Fed split on outlook for further US cuts
Leading judge says court administration model 'outdated'
MARKET CLOSE: NZ shares fall; Goodman placement sees property stocks sold

IRG See IRG research reports