Annual trade deficit at 11-year high

Annual trade deficit at 11-year high – Media release

29 January 2019

Fuel imports rose sharply last year, driving up the annual trade deficit to $5.9 billion for the December 2018 year, Stats NZ said today.

The trade deficit for 2018 is the largest annual trade deficit since the October 2007 year. The latest deficit is equal to 10 percent of exports, compared with 17 percent in the October 2007 year.

Both imports and exports were up for the December year, but the deficit has widened because imports have risen more.

Annual imports for the year ended December 2018 reached a new high of $63.4 billion, up $6.9 billion (12 percent) from 2017.

“The lift in total imports in 2018 reflects large rises in the value of imported petrol and crude oil, as world prices reached high levels in the second half of the year,” international statistics manager Tehseen Islam said.“In addition, recent falls in the New Zealand dollar has an upward effect on both export and import prices and their New Zealand-dollar values.”

The value of imported petroleum and products for the December 2018 year was $7.7 billion, up $2.4 billion (44 percent) from last year. The biggest changes were for:

• fuels, up $1.2 billion
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• crude oil, up $1.1 billion, mainly reflecting higher international crude oil prices.
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The value of annual exports for the December 2018 year was $57.5 billion, up $3.9 billion (7.2 percent) from 2017.

Exports of meat and logs led the exports rise. For the December 2018 year, the value of meat exports increased $814 million (12 percent) to $7.4 billion. Sheep meat exports increased $546 million, and beef was up $227 million. Logs, wood, and wood articles rose $596 million (13 percent) to $5.2 billion.

Milk powder, butter, and cheese (our largest export commodity group) rose $356 million (2.5 percent) to $14.3 billion from 2017.

December 2018 trade balance

The monthly trade balance was a surplus of $264 million (4.8 percent of exports). In December 2017 there was a surplus of $614 million.

December 2018 imports

For the December 2018 month, imports were up $323 million (6.6 percent) to $5.2 billion.

This monthly increase was driven by petroleum and products (up $251 million or 58 percent), led by crude oil, up $201 million.

Aircraft and parts also contributed to the imports rise, up $151 million from December 2017. Imports of aircraft and parts are irregular and can mean large rises or falls in monthly figures.

December 2018 exports

In the December 2018 month, exports were little changed, down $27 million (0.5 percent) to $5.5 billion compared with December 2017.

The leading contributors were exports of meat and edible offal, down $70 million, and aluminium and aluminium articles, down $70 million.

Milk powder, butter, and cheese fell $17 million (0.9 percent), with butter, down $113 million, while milk powder rose, up $71 million.

In contrast to these falls, crude oil rose $79 million, and preparation of milk, cereals, flour, and starch (which include infant formula) rose $67 million.

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