Top Scoops

Book Reviews | Gordon Campbell | Scoop News | Wellington Scoop | Community Scoop | Search

 

NZ current-account gap widens

NZ current-account gap widens as cost of imports rise


By Paul McBeth

Dec. 22 – New Zealand’s current account deficit widened to NZ$15.5 billion in the year ended Sept. 30 as the kiwi dollar fell and crude oil rose, driving up import costs.

The deficit widened from a revised NZ$14.98 billion in the 12 months ended June 30, according to Statistics New Zealand. The deficit expanded to 8.6% of gross domestic product from 8.4%, which may undermine the nation’s AA+ credit rating as the economy contracts and global growth falters.

“The data was not good, with an internationally high current account deficit and debt level, at an unusually difficult time to fund and refinance such positions,” said Robin Clements, chief economist at UBS New Zealand. “This continues to represent a material downside risk for the exchange rate.”

The gap between exported goods and imported goods rose by NZ$418 million year-on-year, while the gap for services rose by NZ$333 million. The overall deficit rose 9.6% to NZ$5.99 billion from NZ$5.47 billion last September.

Khoon Goh, senior markets economist at ANZ National Bank, said the yawning deficit may draw more attention in coming months, with the prospect that the gap “will probably get close to 9% of GDP early next year.”

New Zealand’s economy probably shrank 0.5% in the third quarter, extending the nation’s first recession since 1998. Goh predicts the slump will extend into next year, with a contraction of 1% over the 2009 calendar year.

“The current account adjustment should see weaker domestic demand and trim back the currency,” said. “We should see weaker growth in the New Zealand economy.”

The New Zealand dollar has dropped 24% against the U.S. dollar in the past six months and traded recently at 57.53 U.S. cents.

(Businesswire)

ENDS

© Scoop Media

 
 
 
Top Scoops Headlines

 


Philip Temple: Hang On A Minute, Mate
Peter Dunne quietly omits some salient facts when arguing for retention of MMP’s coat-tailing provision that allows a party to add list seats if it wins one electorate and achieves more than 1% or so of the party vote... More>>


Cheap Grace And Climate Change: Australia And COP26

It was not for everybody, but the shock advertising tactics of the Australian comedian Dan Ilic made an appropriate point. Australia’s Prime Minister Scott Morrison, a famed coal hugger, has vacillated about whether to even go to the climate conference in Glasgow. Having himself turned the country’s prime ministerial office into an extended advertising agency, Ilic was speaking his language... More>>


Binoy Kampmark: Funeral Rites For COVID Zero
It was such a noble public health dream, even if rather hazy to begin with. Run down SARS-CoV-2. Suppress it. Crush it. Or just “flatten the curve”, which could have meant versions of all the above. This created a climate of numerical sensitivity: a few case infections here, a few cases there, would warrant immediate, sharp lockdowns, stay-at-home orders, the closure of all non-vital service outlets... More>>


Dunne Speaks: Labour's High Water Mark
If I were still a member of the Labour Party I would be feeling a little concerned after this week’s Colmar Brunton public opinion poll. Not because the poll suggested Labour is going to lose office any time soon – it did not – nor because it showed other parties doing better – they are not... More>>



Our Man In Washington: Morrison’s Tour Of Deception

It was startling and even shocking. Away from the thrust and cut of domestic politics, not to mention noisy discord within his government’s ranks, Australian Prime Minister Scott Morrison could breathe a sign of relief. Perhaps no one would notice in Washington that Australia remains prehistoric in approaching climate change relative to its counterparts... More>>



Binoy Kampmark: Melbourne Quake: Shaken, Not Stirred

It began just after a news interview. Time: a quarter past nine. Morning of September 22, and yet to take a sip from the brewed Turkish coffee, its light thin surface foam inviting. The Australian city of Melbourne in its sixth lockdown, its residents fatigued and ravaged by regulations. Rising COVID-19 numbers, seemingly inexorable... More>>