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Current Account Deficit Widens Further

Current Account Deficit Widens Further

The Balance of Payments current account deficit widened further to record a seasonally adjusted increase of $274 million in the September 2003 quarter, according to Statistics New Zealand. The deficit represents the difference between New Zealand's total overseas earnings and payments during the quarter. Falling values of services exports, combined with increasing values of services imports, were the main contributors to the widening deficit this quarter. Lower income from royalties and lower tourism receipts were the main contributors to the fall in exports of services. While the number of overseas visitors was up this quarter, the number of days they spent in New Zealand fell.

The increase in services imports was driven by volumes in the September 2003 quarter with increases in expenditure on overseas travel and transport services by New Zealanders. These increases reflected greater numbers of New Zealanders travelling overseas and taking longer trips than those that travelled in the June 2003 quarter.

The current account balance for the year ended September 2003 was a deficit of $6,004 million, which compares with the September 2002 deficit of $4,398 million.

New Zealand's net debtor position increased by $4.0 billion (4.0 percent) to $102.1 billion (New Zealand's international investment liabilities were greater than its international investment assets) between 30 June 2003 and 30 September 2003. The key features were a $6.5 billion net inflow of capital to New Zealand, partly offset by a $1.7 billion fall in financial derivative net liability positions, and a $0.8 billion fall in net liabilities arising from changes in the value of assets and liabilities.

Brian Pink

Government Statistician

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