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


NZ posts record current account surplus in first quarter

NZ posts record current account surplus in first quarter on exports, visitors

By Jonathan Underhill

June 18 (BusinessDesk) - New Zealand recorded a record current account surplus in the first quarter, as exports such as meat and dairy drove the goods balance to an all-time high and the country enjoyed spending by an inflow of overseas visitors.

The current account surplus was $1.41 billion in the three months ended March 31, from a revised deficit of $1.5 billion in the fourth quarter of 2013. The annual deficit was $6.3 billion, or 2.8 percent of gross domestic product, matching the level of March 2011, from a revised annual gap of $7.6 billion, or 3.4 percent of GDP, three months earlier.

The figures about matched economists’ expectations in a Reuters survey of a quarterly surplus of $1.3 billion and annual deficit of $6.4 billion. The surplus in the latest quarter compares to a surplus of just $107 million in the same period last year, when drought disrupted farm output. Global supplies of dairy products have come more into balance this year, and prices have retreated from their highs in recent months. The New Zealand dollar recently traded at 86.53 US from 86.52 cents immediately before the release.

“By the March quarter of this year, export volumes had fully recovered from last year’s drought, while commodity prices were at or near record highs,” Michael Gordon, senior economist at Westpac Banking Corp, said in a note before the figures were released. He expects the annual deficit to narrow to 2.3 percent of GDP in the June quarter.

The balance on goods widened to a record $2.5 billion in the first quarter, as exports climbed to $13.9 billion while imports retreated to $11.4 billion. The balance on services jumped to $1.69 billion, from $124 million three months earlier, reflecting spending by overseas visitors in what is the busiest quarter for tourists.

The balance on income was a deficit of $2.68 billion, just narrower than the December quarter’s $2.7 billion gap, as the income outflow fell to $4.2 billion from $4.36 billion, while the inflow fell to $1.5 billion from $1.64 billion.

Statistics New Zealand said this reflected lower profits overseas for New Zealand-owned firms, and a drop in income for foreign investors here, as a result of lower dividend payments. While the banking sector increased profits in New Zealand it was offset by lower earnings for other corporates.

The nation’s net liability position at March 31 was $148 billion, or 65.3 percent of GDP, up from $146.9 billion, or 66.4 percent of GDP at Dec. 31.

New Zealand’s net external debt position, which excludes the value of financial derivatives, was $139 billion, or 61.4 percent of GDP, the lowest since December 2007, reflecting reduced borrowing overseas by both the government and the banking sector.


© 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