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


Quarterly current account deficit narrows

Quarterly current account deficit narrows – Media release

The seasonally adjusted current account deficit narrowed to $2.5 billion for the September 2012 quarter, Statistics New Zealand said today. This compares with a deficit of $2.8 billion in the previous quarter.

The current account measures New Zealand's transactions with the rest of the world. A current account deficit means that the rest of the world earned more from New Zealand than New Zealand earned from overseas.

The smaller deficit this quarter was mainly due to a fall in profits earned by foreign-owned companies in New Zealand. These profits can be reinvested in New Zealand, or returned overseas as dividends.

"Although foreign-owned companies earned less in New Zealand this quarter, over $1.0 billion was still reinvested in New Zealand, the third quarter in a row that reinvested earnings have been at this level," balance of payments manager John Morris said.

A rise in insurance premiums partly offset the fall in profits earned by overseas-owned companies in the September 2012 quarter. Some insurance policies were renewed at higher premiums, which caused international insurance payments to increase by $84 million this quarter.

The annual current account balance was a deficit of $9.9 billion (4.7 percent of GDP) for the September 2012 year. This compares with a deficit of $8.8 billion (4.3 percent of GDP) for the September 2011 year. The larger annual current account deficit was due to a $1.4 billion increase in imports of goods, particularly oil and cars. The rise in imports of goods was partly offset by a fall in the income deficit, as New Zealand-owned companies earned more profits overseas in the latest year.

New Zealand's net international liability position was $148.4 billion (71.2 percent of GDP) at 30 September 2012, relatively unchanged from 30 June 2012. A net inflow of funds into New Zealand was mostly offset by exchange-rate changes decreasing the value of New Zealand's international liabilities.

An inflow of funds from overseas is required to fund a current account deficit – New Zealand's overseas expenditure is funded by either an inflow of foreign investment from overseas, or a withdrawal of New Zealand's assets held abroad.

The net inflow of funds into New Zealand in the latest quarter featured $1.3 billion of reinsurance claim settlements relating to the Canterbury earthquakes. Over one-third of total overseas reinsurance claims from the earthquakes has now been settled.


Published 19 December 2012

For more information about these statistics:
• Visit Balance of Payments and International Investment Position: September 2012 quarter

• Open the attached files

© Scoop Media

Business Headlines | Sci-Tech Headlines


Banks: Westpac Keeps Core Government Transactions Contract

The local arm of Westpac Banking Corp has kept its contract with the New Zealand government to provide core transactions, but will have to share peripheral services with its rivals. More>>


Science Investment Plan: Universities Welcome Statement

Universities New Zealand has welcomed the National Statement of Science Investment released by the Government today... this is a critical document as it sets out the Government’s ten-year strategic direction that will guide future investment in New Zealand’s science system. More>>


Scouring: Cavalier Merger Would Extract 'Monopoly Rents' - Godfrey Hirst

A merger of Cavalier Wool Holdings and New Zealand Wool Services International's two wool scouring operations would create a monopoly, says carpet maker Godfrey Hirst. The Commerce Commission on Friday released its second draft determination on the merger, maintaining its view that the public benefits would outweigh the loss of competition. More>>


Scoop Review Of Books: She Means Business

As Foreman says in her conclusion, this is a business book. It opens with a brief biographical section followed by a collection of interesting tips for entrepreneurs... More>>


Hourly Wage Gap Grows: Gender Pay Gap Still Fixed At Fourteen Percent

“The totally unchanged pay gap is a slap in the face for women, families and the economy,” says Coalition spokesperson, Angela McLeod. Even worse, Māori and Pacific women face an outrageous pay gap of 28% and 33% when compared with the pay packets of Pākehā men. More>>


Housing: English On Housing Affordability And The Economy

"Long lead times in the planning process tend to drive prices higher in the upswing of the housing cycle. And those lead times increase the risk that eight years later, when additional supply arrives, the demand shock that spurred the additional supply has reversed. The resulting excess supply could produce a price crash..." More>>


Get More From Scoop

Search Scoop  
Powered by Vodafone
NZ independent news