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

 

NZ current account gap widens less than expected

NZ current account gap widens less than expected, seen growing in 2011

Dec. 22 (BusinessDesk) – New Zealand’s current account deficit widened less than expected in the third quarter, though the gap is set to widen in 2011 as economic recovery spurs imports and profits for foreign-owned companies.

The deficit was $1.77 billion in the three months ended Sept. 30, from a gap of $987 million in the second quarter, according to Statistics New Zealand. The annual current account gap widened to $5.93 billion from $5.6 billion.

Economists had expected the quarterly deficit to grow to $2.3 billion and the milder deterioration may buy the nation some breathing space after Standard & Poor’s cut the outlook on the AA+ sovereign to ‘negative’, citing the external imbalances. The nation’s external position has improved because the weak domestic economy has kept a lid on imports and profits from foreign-owned firms, while commodity export prices have climbed.

“As the economy recovers, profitability improves and import demand lifts the current account will widen further,” said Jane Turner, economist at ASB, in a note.

The current account deficit amounted to 3.1% of gross domestic product, up from 3% in the previous quarter and compared to expectations of 3.4%.
Turner forecasts the deficit will reach 5.2% of GDP by 2012, still well below the recent peak in 2008 of 8.7% of GDP.

The New Zealand dollar barely budged after the report, trading at 74.27 U.S. cents from 74.33 cents immediately before the numbers were released.

The seasonally adjusted balance of payments position was a surplus of $35 million, a turnaround from the $1.9 billion deficit in the June quarter, largely reflecting the government statistician’s decision to recognise an estimated $1.7 billion of reinsurance inflows related to the Canterbury earthquake.

Economists say this could grow as the full extent of claims is known.

Excluding the reinsurance flows, the deficit would have widened to about 4% of GDP, ASB’s Turner says.

New Zealand's net international liabilities were little changed at $162.5 billion or 85.2% of GDP at Sept. 30, down from $163.1 billion, or 86.3% of GDP at June 30.

(BusinessDesk)

© Scoop Media

 
 
 
Business Headlines | Sci-Tech Headlines

 

Land Report: Issues With Soil Degradation

An environmental report released today has found we are damaging and losing our soils and our native plants and animals. More>>

ALSO:

Water Quality Report: Cause For Optimism

National River Water Quality Trends released by Land, Air, Water Aotearoa (LAWA) this week, reveal that for all river water quality parameters monitored over a 10 year period, more sites were improving than deteriorating. More>>

ALSO:

IMF Report On NZ: Positive Economic Outlook

Minister of Finance Grant Robertson has welcomed the IMF’s Concluding Statement, released following its annual visit, which provides an independent assessment of the strength of the New Zealand economy. More>>

ALSO:

Retail Power Price: Review Panel Named

The Energy and Resources Minister Megan Woods has released the details of who will sit on an expert advisory panel which is tasked with leading a review into the price of electricity in New Zealand. More>>

ALSO:


Increasingly Disruptive Threats: Govt Cyber Security Refresh

Broadcasting, Communications and Digital Media Minister Clare Curran today announced a comprehensive refresh of New Zealand’s approach to cyber security. More>>

ALSO:


Regional Growth: Action Plan To Modernise Taranaki’s Economy

The Provincial Growth Fund (PGF) will invest up to $20 million to help future-proof the Taranaki region by diversifying its economy, creating additional jobs and leveraging off the strong base the region has established through its oil, gas and agricultural ... More>>

ALSO:

Winding Down Irrigation: Funding Ends For Crown Irrigation Investment

The Government has begun winding down public funding for large-scale irrigation through Crown Irrigation Investments Limited (CIIL), in line with the Coalition Agreement and the Confidence & Supply Agreement. More>>

ALSO: