NZ posts bigger-than-expected current account surplus in first quarter

Wednesday 17th June 2015

New Zealand posted a larger-than-expected current account surplus in the first quarter as spending by tourists widened the services balance and the country benefited from lower oil prices.

The current account surplus was $662 million in the three months ended March 31, according to Statistics New Zealand. The annual deficit was $8.6 billion, or 3.6 percent of gross domestic product, the highest in two years. Economists expected a quarterly surplus of $240 million, for an annual deficit of $9.01 billion, or 3.8 percent of GDP, according to a Reuters survey.

Short-term visitors to New Zealand rose to 291,784 in March, a record for that month and rounding out a 12-month period in which tourists rose to a record 2.95 million. Visitors were lured to New Zealand in the first quarter by the Cricket World Cup and Chinese New Year and their spending helped drive up the services balance to a $2.2 billion surplus from $1.7 billion in the same quarter last year. Meanwhile the actual balance on goods was a surplus of $834 million in the quarter, down from $2.4 billion a year earlier, when dairy prices were near their peak.

Exports were $12.4 billion, compared with $13.7 billion in the first quarter of 2014, while imports rose to $11.6 billion from $11.3 billion.

The primary income balance, which measures returns to foreign owners of businesses in New Zealand and offshore earnings from New Zealand-owned companies, narrowed to about $2.3 billion, the smallest since the third quarter of 2013. Foreign companies paid fewer dividends to their overseas shareholders and New Zealand-owned companies earned higher profit overseas, the government statistician said.

New Zealand's net foreign liabilities fell to 64.2 percent to GDP, or $153.5 billion, from 65 percent of GDP, or $154.6 billion, three months earlier. That was the lowest ratio since 2001.

BusinessDesk.co.nz

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