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


Fall In Imports Drives Current Account Surplus

New Zealand’s COVID-19 lockdown saw imports fall more than exports, leading to a record current account surplus of $0.5 billion in the June 2020 quarter, Stats NZ said today.

“New Zealand earned more than it spent in transactions with the rest of the world due to a sharp slowdown in international trade because of COVID-19,” international statistics senior manager Peter Dolan said.

“This reflects a slump in demand for oil imports and in spending by international tourists, while dairy exports held up in the June quarter, boosting the current account into the black.”

New Zealand’s seasonally adjusted current account surplus of $0.5 billion in the June 2020 quarter is the biggest in the series since 1971, and compares with a $1.4 billion deficit in the March 2020 quarter.

“A current account surplus occurs when New Zealand’s earnings from the rest of the world from exports, income on investments, and secondary income are larger than our expenses to the rest of the world,” Mr Dolan said.

“This is only the 11th quarterly seasonally adjusted current account surplus in the series. New Zealand typically runs a deficit, spending more than we earn – the last time we had a surplus was 11 years ago.”

The current account surplus was driven by the goods balance turning from a deficit into a $2.2 billion surplus. Exports fell $0.8 billion in the quarter but imports fell much more, down $3.2 billion.

“Domestic demand for crude oil imports fell as people stayed home due to the COVID-19 lockdown in the first half of the June quarter,” Mr Dolan said.

“Crude oil imports were much lower than usual from April to June 2020, with much less travel by road and air. Oil imports fell to zero in July, just after the end of the June 2020 quarter. With only essential businesses allowed to operate during alert levels 3 and 4, wholesale and manufacturing trade also shrank, reducing the imports required for production and further hitting related suppliers.”

See Crude oil imports dry up in July and Manufacturing and wholesale trade: June 2020 quarter for further information.

Services balance in deficit

New Zealand’s services balance was in deficit for the first time since the September 1998 quarter.

Exports of services were $3.9 billion in the June 2020 quarter, down $2.5 billion from the March 2020 quarter. Travel services were $2 billion for the quarter, down 48 percent (or $1.9 billion), after the border was closed to overseas visitors.

Imports of services were also down in the June 2020 quarter, by $1.8 billion. At $4 billion it is the smallest quarterly value since the March 2014 quarter.

“Overseas tourist spending on travel and transportation services took a big hit in the latest quarter as border crossings were restricted. However, there were still international visitors in the country from before the lockdown and the limited number of flights increased the cost of transporting freight,” Mr Dolan said.

See COVID-19 knocks spending by overseas visitors and students, Export prices hit new high and the New Zealand International Trade dashboard for further information.

For the year to June 2020 the current account deficit was $5.8 billion, or 1.9 percent of gross domestic product (GDP). This compares to $11.6 billion (3.8 percent of GDP) for the year to June 2019. This is the smallest the current account has been as a percentage of GDP since the year ended June 2010, when it was 1.7 percent of GDP.

© 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>>