NZ October trade deficit wider than expected as imports top $6 billion
By Rebecca Howard
Nov. 27 (BusinessDesk) - Imports into New Zealand topped $6 billion for the first time in October with goods from China rising a record amount as the two nations mark 10 years of free trade.
The October deficit was $1.3 billion, Statistics New Zealand said. Economists surveyed by Bloomberg had expected a deficit of $850 million. The annual deficit was $5.8 billion versus an expected $5.1 billion shortfall. It was the widest annual deficit since the October 2007 year.
October imports rose 14.1 percent on the year to $6.2 billion and petroleum and products were the main contributor, up $257 million or 68 percent.
Imports from China rose $430 million or 41 percent on the year to $1.5 billion, led by cranes and cellphones. This is the largest dollar value increase for monthly Chinese imports on record, Stats NZ said.
“October 2018 marks the 10-year anniversary of the New Zealand–China free trade agreement,” international statistics manager Tehseen Islam said. New Zealand was the first developed country to ink a free trade deal with China in 2008. China is now New Zealand’s largest trading partner, with two-way trade valued at more than $28 billion in 2018.
“Two-way goods trade with China is continuing to strengthen. On an annual basis, imports from China are twice the value they were in the October 2008 year, while exports have more than quadrupled," Islam said.
That relationship is coming under closer scrutiny as tensions between China and the US leave New Zealand stretched between an increasingly important trading partner and a traditional security ally respectively. Trade Minister David Parker this month said New Zealand was trying to position itself as a link between world's two biggest economies which are locked in a trade war.
Meanwhile, Prime Minister Jacinda Ardern is coming under pressure to act as academic Anne-Marie Brady has faced multiple break-ins since writing a paper on China's use of soft power, and ministers are considering excluding Chinese technology firm Huawei from building 5G telecommunications networks.
Today's data showed exports were up 6.6 percent to $4.9 billion, which Islam said were led by fruit and reflected "unusually high kiwifruit exports for an October month”.
Kiwifruit exports are typically low in October, so both value and quantity in October 2018 were up sharply when compared with the same month last year. The total value of fruit rose $118 million or 137 percent to $204 million, led by kiwifruit, which was up $112 million.
Milk powder, butter, and cheese fell $43 million or 3.3 percent to $1.2 billion. Quantity fell 6.3 percent. Milk powder led this fall, down $45 million or 6.8 percent. Quantity was down 12 percent.