Scoop has an Ethical Paywall
Work smarter with a Pro licence Learn More

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

 

NZ annual current account gap widens as imports rise

NZ annual current account gap widens as imports rise, foreigners reap profits

Dec. 18 (BusinessDesk) – New Zealand’s annual current account deficit widened to a four-year high as a reviving economy took in more imports and foreigners continued to reap greater profits here than kiwi firms garnered abroad.

The current account gap widened to $8.8 billion, or 4.1 percent of gross domestic product, in the year ended Sept. 30, according to Statistics New Zealand. The actual deficit in the latest quarter widened to $4.78 billion from a revised $1.3 billion three months earlier. A quarterly gap of $4.3 billion and an annual deficit of $8.83 billion, or 4.1 percent of GDP, were forecast in a Reuters survey.

Today’s release is the first to incorporate revised statistics that include an improved surveying of spending by international visitors and students and an estimate of imports of goods below NZ Customs’ $1,000 threshold. The government statistician said goods under $1,000 have become more important as kiwis buy more via the internet from overseas.

The data improvements lowered the current account gap as a percentage of GDP to an average 4.8 percent over the past 10 years from 5.6 percent, the department said.

In the third quarter, the balance on goods turned to a deficit of $1.8 billion from a surplus of $1.1 billion three months earlier. This was mainly driven by a jump in imports to $12.9 billion, a record for the series, from $11 billion, while exports fell to $11 billion from $12 billion.

Advertisement - scroll to continue reading

Are you getting our free newsletter?

Subscribe to Scoop’s 'The Catch Up' our free weekly newsletter sent to your inbox every Monday with stories from across our network.

The balance on income had the biggest negative impact on the current account gap, at a deficit of $2.2 billion, little changed from the third quarter. The income outflow was $3.9 billion, up from $3.77 billion in the second quarter, while the inflow improved to $1.7 billion from $1.5 billion.

The balance on services was a deficit of $581 million from a revised gap of just $7 million three months earlier. The balance on current transfers was a deficit of $149 million.

The nation’s financial account showed a net investment outflow of $507 million in the third quarter as non-residents withdrew $1.8 billion of investments from New Zealand, outpacing a $1.3 billion withdrawal of New Zealand investments abroad.

Net international debt fell by $2.6 billion to $145.6 billion at Sept. 30 compared to June 30, as a $9.2 billion decline in borrowing was partly offset by a $7.1 billion fall in lending. Some $9.2 billion of the decline in borrowing related to banking sector borrowing.

Banking sector international debt was $101.6 billion, the lowest since March 2007.

The net international equity position at Sept. 30 was -$4.5 billion, the lowest position since the fourth quarter of 2005.

(BusinessDesk)

© Scoop Media

Advertisement - scroll to continue reading
 
 
 
Business Headlines | Sci-Tech Headlines

 
GenPro: General Practices Begin Issuing Clause 14 Notices

GenPro has been copied into a rising number of Clause 14 notices issued since the NZNO lodged its Primary Practice Pay Equity Claim against General Practice employers in December 2023.More

SPADA: Screen Industry Unites For Streaming Platform Regulation & Intellectual Property Protections

In an unprecedented international collaboration, representatives of screen producing organisations from around the world have released a joint statement.More

 
 
 
 
 
 
 
 
 
 
 
 

Join Our Free Newsletter

Subscribe to Scoop’s 'The Catch Up' our free weekly newsletter sent to your inbox every Monday with stories from across our network.