Wednesday 20th March 2019
|Text too small?|
New Zealand’s annual current account deficit continued to widen in the December quarter and the nation’s net international liability position worsened as offshore assets took a hit.
The annual deficit widened to $10.97 billion, or 3.7 percent of gross domestic product, versus an annual deficit of $8.2 billion, or 2.9 percent of GDP, in the same period a year earlier, Stats NZ said.
The dollar was at 68.49 US cents versus 68.52 cents before the announcement.
The shortfall was slightly narrower than expected with economists projecting an annual deficit of 3.9 percent of GDP in a Bloomberg poll.
The goods and services balance slipped back into a deficit of $303 million versus a surplus of $433 million in the prior quarter. The goods balance was a deficit of $5.1 billion versus a deficit of $4.6 billion in the September quarter, while the services balance was a surplus of $4.8 billion versus a surplus of $5.02 billion.
The primary and secondary income balance was a deficit of $10.67 billion versus a deficit of $11.0 billion in the September quarter.
In 2009, the current account deficit dropped from a record peak of 7.8 percent of GDP to 2.2 percent. It has hovered between 2 percent and 4 percent since.
New Zealand’s net international liability position, however, widened to $167.3 billion, or 57 percent of GDP, at the end of December from $156.3 billion, or 53.6 percent of GDP, at the end of September.
The net international liability position represents how much the country’s overseas liabilities exceed its overseas assets.
As a percentage of GDP, it was highest since December 2016.
Weaker global equity markets saw the market price of New Zealand’s overseas assets and liabilities fall by a net $5.9 billion. This was the largest drop in net market price changes since June 2000, Stats NZ said.
“Many New Zealanders would have experienced the impact of the change as a fall in the value of their KiwiSaver balance during the quarter,” said international statistics manager Peter Dolan.
The value of New Zealand’s international assets was $258.8 billion as of Dec. 31, versus $269.5 billion at the end of September. The fall was mainly due to the quarters’ downturn of global stock markets, Stats NZ said.
On a quarterly basis, the unadjusted deficit narrowed to $3.26 billion from $6.18 billion in the prior quarter.
The goods balance narrowed to a $1.7 billion deficit from a deficit of $3.2 billion in the prior quarter. The services balance showed a surplus of $970 million versus a $327 million deficit in the September quarter.
In seasonally adjusted terms, however, the current account deficit was $2.47 billion in the December quarter, largely unchanged from $2.49 billion in the September quarter.
Stats NZ said decreased dairy and meat exports widened the goods deficit but that was offset by increased spending by overseas visitors and a smaller income deficit.
No comments yet
Rio Tinto decision following strategic review of Tiwai
Contact says smelter closure is ‘disappointing’
South Port (SPN) Statement on NZAS Tiwai Point Aluminium Smelter Closure
Rio Tinto announcement on Tiwai Aluminium Smelter
Me Today announces equity raising to accelerate growth
Scott Technology Trading Update; Rising to the COVID Challenge
New non-binding indicative offer received from apvg, shareholder meeting deferred
U.S. Added 4.8 Million Jobs in June as Reopened Businesses Rehired
Auditors have a duty to be alert to fraud
Strong sales recovery but uncertainty remains over economic outlook and potential second wave of COVID-19