NZ terms of trade rose 2.1% in second quarter

NZ terms of trade rose 2.1% in second quarter on export prices

Sept. 10 (BusinessDesk) – New Zealand’s terms of trade rose less than expected in the second quarter, as prices rose for exports such as dairy products, logs and meat, outpacing gains in imports.

The terms of trade rose 2.1% in the three months ended June 30, according to Statistics New Zealand. That’s less than half the gain forecast in a Reuters survey of 4.5%. Export prices rose 3.8% against a forecast gain of 5%, while import prices climbed 1.7%, about twice the expected increase.

The terms of trade shows how much imports can be bought for a set amount of exports compared to the preceding three months. An improving trade position is a sign that the economy is rebalancing away from domestic consumption toward export growth, which the central bank says is a healthy shift.

The gain in export prices was led by a 6% gain in dairy products, 4.5% rise in meat, 4.8% gain in forest products and 4.8% advance in petroleum products.

Import prices were led by a 4.7% gain for petroleum, 4.3% rise for food and beverages and 10% rise in non-fuel crude materials.

Volumes of exports were led by a 5.3% gain in forest products, amid strong global demand, a 3.2% increase in meat volumes and 18% rise in casein.

The terms of trade rose 12.7% in the year ended June 30, the biggest annual increase in 31 years.

Terms of trade is one of the final pieces of data that goes into gross domestic product, which is forecast to have expanded 0.8% in the second quarter, According to a Reuters survey.

(BusinessDesk)

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