Current Account Deficit Hits $6.6 Billion For Year

September 1999 Quarter Balance of Payments

The September 1999 quarter current account deficit was $2,646 million, said Government Statistician Len Cook.

After adjustment for seasonal factors, the current account deficit reduced by $180 million in the September 1999 quarter. The main impact on the current account was a shift from deficit to surplus in the seasonally adjusted goods balance. This offset growing deficits in the other current account components: services, and income and transfers.

The seasonally adjusted goods surplus was due to a rise in exports, partially countered by a smaller rise in imports. The relatively strong growth in exports of goods in September follows two quarters of decline. Partly offsetting this surplus on goods was a $52 million rise in the seasonally adjusted services deficit. The investment income deficit also grew by $69 million between the June and September 1999 quarters. Income earned by New Zealand companies from their investments overseas, particularly in the commodity sectors, increased by $226 million. This rise was more than offset by the earnings of foreign investors from their investments in New Zealand, which rose $295 million, to nearly $2 billion.

The current account balance trend show the deficit steady at $1.9 billion in both the June and September 1999 quarters. With the exception of the period from the September 1997 to the December 1998 quarters, the current account balance has shown a pattern of steadily growing quarterly deficits since the June 1993 quarter. After steadily rising between the June 1996 and September 1997 quarters, the goods and services surplus has fluctuated around the near-balance before falling into deficit in the last three quarters. The income and transfers deficit fell between the June 1997 and March 1998 quarters before rising steadily to $1.7 billion in the latest quarter.

The current account deficit for the year ended September 1999 was $6,610 million. This compares with a $6,217 million deficit for the year ended June 1999 and a $5,043 million deficit for the year ended September 1998.

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