Imports rise tops exports growth
A strong burst in imports in the past three months has seen New Zealand's annual current account deficit worsen to $8.8 billion in the September year, equal to 4.1 per cent of GDP.
The annual deficit was $8.2 billion in the June year, equal to 3.9 per cent of GDP.
Economists said the September quarter current account deficit was bigger than expected, with a surprisingly large level of imports, but that was because of lumpy one-off imports.
But revisions to previous quarterly figures made earlier deficits smaller than at first reported, mainly because of higher estimated spending by foreign tourists.
The seasonally adjusted current account deficit was $2.6 billion in the September quarter, $0.3 billion larger than in the June quarter.
"For the first time in five years, New Zealand imported more goods and services than we exported," balance of payments manager Jason Attewell said.
It was the worst current account deficit since the end of 2008.
Imports were up 7.2 per cent in the quarter, with goods imports up more than 9 per cent due to the arrival of military helicopters.
Exports in the quarter were up 4.5 per cent, with the goods trade boosted by strong dairy and forestry exports.
The annual current account deficit at 4.1 per cent of GDP was in line with market forecasts, despite the worse than expected September quarter. Westpac Bank economists said that was because positive revisions to historical figures offset the larger September quarter deficit.
The revisions of history related to better estimates of visitor spending in New Zealand offset by new estimates of imports of goods worth less than $1000, Westpac said.
ASB said the impact of the historic revisions meant the annual deficit in the June period was 0.4 per cent smaller, relative to GDP, worth $855 million in dollar terms.
At the end of September, New Zealand's net international liability position was $150.1 billion (equal to 69.5 per cent of GDP), down from $151.6 billion (71.2 per cent of GDP) at 30 June 2013.
The smaller net position in the latest quarter was driven by changes in the value of New Zealand's overseas assets and liabilities.
Within the net international liability position, the banking sector reduced their borrowing by $9.2 billion. As a result, the banking sector's net overseas debt fell to its lowest level since the March 2007 quarter.