Video | Agriculture | Confidence | Economy | Energy | Employment | Finance | Media | Property | RBNZ | Science | SOEs | Tax | Technology | Telecoms | Tourism | Transport | Search

 


Trade balance - January 2002

Data Flash (New Zealand)

Result: A trade deficit of $245m was recorded compared with expectations of a $80m surplus.

Implication for markets: The trade balance is now on a deteriorating trend, taking some of the gloss off the positive medium-term NZD story. Strong imports confirm the economy's resilience and that markets are correct to anticipate that the RBNZ will soon begin to withdraw monetary stimulus, beginning with a 25bps tightening in May.

Commentary

The January trade balance was much worse than expected. As expected, export growth remained subdued. However, imports rebounded very strongly during the month - a sign of economic strength - with intermediate and consumption goods leading the way.

With the export sector continuing to be affected by still sluggish global demand and weakened prices, and imports being driven higher by robust domestic demand, today's data confirms that the trade balance is now on a deteriorating trend. While the annual current account deficit is likely to have declined to below 3% of GDP in the 2001 calendar year (data due 27 March), a deficit of well over 4% of GDP now appears likely during the current calendar year (more in line with the historic average over the last 20 years).

The prospects for renewed improvement at a later date will depend on the strength of the global recovery and the path of the NZD. We expect further adverse terms and trade influences to cause the deficit to gradually rise again to 3.8% over the course of this year.

Key Points

A provisional merchandise trade deficit of $245m was recorded in January, compared with a surplus of $94m in January 2001. The average deficit for January over the past 10 years is $47m. The annual trade surplus was $651m, compared with a deficit of $1,443m a year earlier.

The result was much worse than the median market expectation of an $80m surplus. Export values were very close to expectations but import values far outstripped expectations.

The value of exports for the three months to January was 2.4% lower than a year earlier, with falling prices now more than offsetting modest growth in volumes. The estimated level of imports for the three months to January was 0.2% higher than a year earlier. Strengthening import volumes has been offset by lower prices, especially for oil.

Imports for the month of January far exceeded market expectations, due probably to higher than expected imports of oil and other intermediate goods and a strong due rebound in imports of consumer goods. Imports of motor vehicles remain elevated as dealers stocking up on cars prior to a scheduled tightening of import standards.

Darren Gibbs, Senior Economist, New Zealand (64) 9 351 1376


© Scoop Media

 
 
 
 
 
Business Headlines | Sci-Tech Headlines

 

I Sing The Highway Electric: Charge Net NZ To Connect New Zealand

BMW is turning Middle Earth electric after today announcing a substantial contribution to the charging network Charge Net NZ. This landmark partnership will enable Kiwis to drive their electric vehicles (EVs) right across New Zealand through the installation of a fast charging highway stretching from Kaitaia to Invercargill. More>>

ALSO:

Watch This Space: Mahia Rocket Lab Launch Site Officially Opened

Economic Development Minster Steven Joyce today opened New Zealand’s first orbital launch site, Rocket Lab Launch Complex 1, on the Mahia Peninsula on the North Island’s east coast. More>>

Earlier:

Marketing Rocks!
Ig Nobel Award Winners Assess The Personality Of Rocks

A Massey University marketing lecturer has received the 2016 Ig Nobel Prize for economics for a research project that asked university students to describe the “brand personalities” of three rocks. More>>

ALSO:

Nurofen Promotion: Reckitt Benckiser To Plead Guilty To Misleading Ads

Reckitt Benckiser (New Zealand) intends to plead guilty to charges of misleading consumers over the way it promoted a range of Nurofen products, the Commerce Commission says. More>>

ALSO:

Half A Billion Accounts, Including Xtra: Yahoo Confirms Huge Data Breach

The account information may have included names, email addresses, telephone numbers, dates of birth, hashed passwords (the vast majority with bcrypt) and, in some cases, encrypted or unencrypted security questions and answers. More>>

ALSO:

Rural Branches: Westpac To Close 19 Branches, ANZ Looks At 7

Westpac confirms it will close nineteen branches across the country; ANZ closes its Ngaruawahia branch and is consulting on plans to close six more branches; The bank workers union says many of its members are nervous about their futures and asking ... More>>

Interest Rates: RBNZ's Wheeler Keeps OCR At 2%

Reserve Bank governor Graeme Wheeler kept the official cash rate at 2 percent and said more easing will be needed to get inflation back within the target band. More>>

ALSO:

Get More From Scoop

 
 
 
 
 
 
 
 
 
Business
Search Scoop  
 
 
Powered by Vodafone
NZ independent news