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.

(BusinessDesk)

© Scoop Media

 
 
 
 
 
Business Headlines | Sci-Tech Headlines

 

Scoop Business: Leighton-Led WGP To Build, Manage Transmission Gully

The Wellington Gateway Partnership, led by a unit of ASX-listed Leighton Holdings, has won the $1 billion contract to build the Transmission Gully road north of Wellington. More>>

ALSO:

Gareth Morgan: The Government’s Fresh Water Policy – Revisited

Fresh water quality is the latest area to be in the sights of Gareth Morgan and his research organisation The Morgan Foundation... They found that the fresh water policy was a bit murkier than the Environment Minister let on. More>>

ALSO:

Interest Rates: RBNZ Hikes OCR To 3.5%, ‘Period Of Assessment’ Now Needed

Reserve Bank governor Graeme Wheeler raised the official cash rate as expected, while signalling a pause in rate hikes to assess the impact of moves so far this year. The kiwi dollar sank after Wheeler said its strength was “unjustified” and that the currency could have “a significant fall.” More>>

ALSO:

Fonterra: Canpac Site 'Resize' To Focus More On Paediatrics

Fonterra is looking at realigning its packing operations at Canpac, in the Waikato, to focus more on paediatric nutritionals... The proposed changes could mean around 110 roles may not be required at the site which currently employs 330. More>>

ALSO:

Scoop Business: Postie Plus Brand Gets 2nd Chance With Well-Funded Pepkor

The Postie Plus brand is getting a new lease of life after South Africa’s Pepkor bought the failed retailer’s assets out of administration and said it will use its purchasing power to reduce costs of stock and fatten margins. More>>

ALSO:

Warming: Warming Signs From State Of Climate Report

Climate data from air, land, sea and ice in 2013 'reflect trends of a warming planet' -- says the latest State of the Climate report, launched by U.S. and New Zealand scientists. More>>

ALSO:

Get More From Scoop

 
 
Computer Power Plus

Standards New Zealand

Standards New Zealand
 
 
 
 
 
 
 
 
Business
Search Scoop  
 
 
Powered by Vodafone
NZ independent news