Balance of Payments - June 1999 quarter

Balance of Payments - June 1999 quarter

Balance of Payments Deteriorates

The June 1999 quarter current account deficit was $1,953 million, said Government Statistician Len Cook.

The seasonally adjusted current account deficit fell $566 million between the March 1999 and June 1999 quarters. This deterioration is the result of a $453 million deterioration in the goods and services balance and a $113 million fall in the income and transfers balance.

A sharp deterioration in the seasonally adjusted goods balance was the main contributor to the deterioration in the current account deficit. The goods deterioration reflects poorer than usual export performance in the March and June 1999 quarters, combined with continued growth in imports. Import growth has been stronger since the September 1998 quarter. The decline in the goods balance has already been signalled in recently published overseas trade statistics.

A worsening of the seasonally adjusted services balance by $75 million added to the deterioration in the goods and services balance in the June 1999 quarter. This was primarily the result of a decline in the seasonally adjusted travel balance, following a particularly strong March quarter result.

The June 1999 quarter recorded the second consecutive deterioration in the seasonally adjusted income and current transfers balance. A fall in the income New Zealand receives on its overseas investments was the main contributor in the June 1999 quarter, offsetting a fall in the income overseas investors receive from their New Zealand investments and an improvement in the seasonally adjusted current transfers balance.

The latest estimate of the current account balance trend confirms a significant deterioration since the December 1998 quarter. This is driven by the sharp decline in the goods trend estimate, combined with a smaller deterioration in the trend estimate for income and current transfers.

The current account deficit of $6,292 million for the year ended June 1999 was 6.3 per cent of GDP. This compares with a $5,697 million deficit for the year ended March 1999, or 5.8 per cent of GDP and a $4,849 million deficit for the year ended June 1998, or 4.9 per cent of GDP.

Len Cook
GOVERNMENT STATISTICIAN
23 September 1999

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