NZ annual current account deficit widens in second quarter

Wednesday 19th September 2012

New Zealand's annual current account deficit widened in the second quarter, as the nation's Australian-owned banks reaped bigger profits and imports rose with fuel costs.

The deficit was $10.1 billion, or 4.9 percent of gross domestic product, in the year ended June 30, from a revised $9 billion, or 4.5 percent of GDP three months earlier, according to Statistics New Zealand.

The actual deficit in the latest quarter was $1.8 billion, greater than the $1.6 billion forecast in a Reuters survey.

The New Zealand dollar didn't move much after the figures were released. It traded at 82.78 US cents from 82.65 cents immediately before the report.

The latest balance of payments data includes revisions as a result of Statistics New Zealand revising the international accounts, resulting in a lower current account gap than previously published and higher net liabilities.

A net inflow of foreign investment helped lift New Zealand's net international liability position to $148.6 billion, or 72.6 percent of GDP, June 30, from $145.6 billion, or 71.9 percent of GDP, at March 31.

The government statistician said it also got new information on the value of overseas reinsurance claims from the Canterbury earthquakes. Total overseas reinsurance claims rose to $17.9 billion from $15.7 billion. Overseas reinsurers settled $1.3 billion of the claims in the second quarter, up from the $1.2 billion of settlements in the first quarter. Some $12.8 billion of claims is still outstanding.

BusinessDesk.co.nz

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