Current account deficit falls again

Current account deficit falls again

18 June 2014

New Zealand's seasonally adjusted current account balance was a deficit of $0.6 billion in the March 2014 quarter, Statistics New Zealand said today. This is $0.3 billion smaller than the December 2013 quarter deficit.

An increase in the value of goods exports, combined with higher spending by overseas visitors to New Zealand contributed to the fall in the current account deficit this quarter.

"The smaller deficit follows last quarter's $1.6 billion fall, making this the smallest current account deficit since 2010," international statistics manager Jason Attewell said.

Unadjusted current account balance in surplus

Before removing seasonal effects, the current account balance was a surplus of $1.4 billion – the largest actual current account surplus ever recorded. This represents a $1.3 billion increase from the March 2013 quarter surplus, mainly driven by increased dairy product exports.

"New Zealand is most likely to record a current account surplus in March quarters, when we have more overseas visitors coming to New Zealand," Mr Attewell said.

A current account surplus means New Zealand's earnings from the rest of the world exceeded our overseas expenditure. As a result, we had $1.3 billion of net outward investment from New Zealand this quarter, mostly due to the Reserve Bank of New Zealand increasing its foreign exchange assets.

New Zealand's annual current account was a deficit of $6.3 billion (2.8 percent of GDP) for the year ended March 2014. This compares with a deficit of $7.6 billion (3.4 percent of GDP) for the year ended December 2013, and is also $2.0 billion smaller than the deficit for the year ended March 2013, when it was 3.9 percent of GDP.

New Zealand's net international liability position, which measures the value of our overseas assets less our overseas liabilities, was $148.0 billion (65.3 percent of GDP) at 31 March 2014. The net liability position increased $1.1 billion from 31 December 2013 (when it was 66.4 percent of GDP) due to valuation changes increasing the value of our overseas liabilities.

For more information about these statistics:
• Visit Balance of Payments and International Investment Position: March 2014 quarter

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