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


NZ balance of payments deficit hits cyclical low point

NZ balance of payments deficit hits cyclical low point

By Pattrick Smellie

Sept. 17 (BusinessDesk) - The annual deficit in New Zealand’s dealings with the rest of the world fell, in line with consensus forecasts, to 2.5 percent of gross domestic product in the year to June 30, hitting what economists expect will prove to be a cyclical lowpoint.

Falling prices for key export commodities, especially dairy products, and a weaker New Zealand dollar are expected to see the balance on the current account rise in future quarters from the lowest annual out-turn since the year to December 2010, when a deficit at 2.3 percent of GDP was recorded.

Reflecting falling dairy prices and a large revision to investment flows into New Zealand from offshore, the deficit on the current account for the three months rose by $1.4 billion from the March quarter, to stand at $2 billion for the quarter.

For the year to June, the current account deficit was $5.8 billion, or 2.5 percent of GDP, compared with 2.7 percent of GDP in the year to March.

The figures are among a slew of last minute key economic indicators ahead of this Saturday’s general election. Tomorrow will see the release of GDP figures for the June quarter, which consensus forecasts expect will be relatively weak at 0.5 percent for the quarter.

Net migration figures due Friday are expected to show a continuing strong net inflow as fewer New Zealanders leave for jobs overseas and more international migrants come here.

“Both prices and volumes of dairy product exports fell in the latest quarter,” said Statistics New Zealand. “Exports of goods fell $1.1 billion from the previous quarter’s record high.”

Dairy prices have fallen roughly 50 percent at global auctions since February this year, although last night’s GlobalDairyTrade auction saw a pause, with prices slightly rebounding from the previous auction, a fortnight ago.

The primary income deficit was $2.62 billion for the quarter, little changed from the three months to March 2014, with imports and exports of services both falling.

Net liabilities to the rest of the world fell to their lowest level in almost 13 years at June 30, measuring $149.7 billion, or 65.3 percent of GDP, compared with $151 billion, or 66.9 percent of GDP, at March 31.

This was “due to changes in the value of New Zealand’s overseas assets and liabilities, including an increase in the value of overseas shares owned by New Zealand investors, more than offsetting a net inflow of foreign investment,” the official statistician said.

However, the country’s net external debt position continued to deteriorate, at $142.3 billion, or 62.1 percent of GDP in the June period, $2 billion larger than in March, “mainly due to increased overseas borrowing (in the form of issuing debt securities) by New Zealand banks during the quarter.” The March figure itself was also revised upwards by $3.08 billion from that originally reported.

Statistics NZ now separately reports outstanding global reinsurance sums owing in the aftermath of the Canterbury earthquakes.

Of $19.7 billion of identified reinsurance claims – an increase of $600 million since March – some $14.8 billion have been settled, leaving $4.9 billion still to arrive.


© Scoop Media

Business Headlines | Sci-Tech Headlines


Auckland Transport: Successful Bridge Repair Opens Two Additional Lanes To Traffic

The opening of two additional lanes on the Auckland Harbour Bridge this morning will help relieve some motorway congestion for motorists heading home to the North Shore tonight. More>>


Statistics New Zealand: COVID-19 Sees Record 12.2 Percent Fall In New Zealand’s Economy

Gross domestic product (GDP) fell by 12.2 percent in the June 2020 quarter, the largest quarterly fall recorded since the current series began in 1987, as the COVID-19 restrictions in place through the quarter impacted economic activity, Stats NZ said ... More>>


Climate: Scientists Release ‘Blueprint’ To Save Critical Ecosystems And Stabilize The Earth’s Climate

A group of scientists and experts produced the first comprehensive global-scale analysis of terrestrial areas essential for biodiversity and climate resilience, totaling 50.4% of the Earth's land. The report was published in Science Advances ... More>>


MPI: Independent Review Launched Into Assurances For Safe Transport Of Livestock By Sea

The Ministry for Primary Industries (MPI) has launched an independent review of the assurances it receives for the safe transport of livestock by sea. MPI Director-General Ray Smith says Mike Heron QC has been appointed to lead the review, which is expected ... More>>


Computers: New Zealand PC Market Grows Nearly 40% Due To Work From Home Demand

COVID-19 had large impacts on demand for PCs as businesses prepared for lockdowns by purchasing notebooks to mobilise their workforce. In the second quarter of 2020, New Zealand's Traditional PC market experienced a 39.7% year-on-year (YoY) growth ... More>>


University Of Auckland: Whale-Watching By Satellite – Follow Their Travels Online

Scientists have successfully attached satellite tracking tags to six New Zealand southern right whales, or tohorā, and are inviting the public to follow the whales’ travels online. Part of a major research project involving the University of Auckland ... More>>

Commerce Commission: Kiwibank Admits System Failures And Agrees To Pay Customers $5.2 Million

Kiwibank has entered into a settlement agreement with the Commerce Commission after reporting that it failed to have in place robust home loan variation disclosure policies, procedures and systems. In a settlement dated 27 August 2020, Kiwibank admitted that ... More>>

Ministry of Health: Public Transport Distancing Requirements Relaxed

Physical distancing requirements on public transport have been reviewed by the Ministry of Health to determine whether they are still required at Alert Level 2 (or below). The Ministry’s assessment is that mandatory face covering and individuals tracking ... More>>


NZHIA: New Zealand Hemp Industry Set To Generate $2 Billion Per Annum And Create 20,000 Jobs

A new report says a fully enabled hemp industry could generate $2 billion in income for New Zealand by 2030, while also creating thousands of new jobs. Written by industry strategist Dr Nick Marsh, the report has prompted calls from the New Zealand Hemp ... More>>


Stats NZ: One In 14 Employed People Report High Risk Of Losing Jobs

About one in 14 workers say they expect to lose their job or business by mid-2021, Stats NZ said today. A survey of employed people in the June 2020 quarter showed 7 percent felt there was a high or almost certain chance of losing their job or business ... More>>

ASB Quarterly Economic Forecast: NZ Economy Doing Better Than Expected, But Challenges Remain

August lockdown estimated to have shaved 8% off NZ’s weekly GDP, and 0.5% off annual GDP Economy now expected to shrink 5% (year-on-year) by end of 2020 Unemployment rate now expected to peak at 7.2% The latest ASB Quarterly Economic Forecast is less ... More>>