For the first time in five years New Zealand imported more goods than it exported - pushing out the quarterly current account deficit by $300 million to $2.6 billion - but this was tempered by overall international liabilities declining.
While the current account deficit ballooned out for the quarter to September, the country's net international liability position declined from $151.6 billion, or 71.2% of gross domestic product (GDP) the previous quarter to June to $150.1 billion or 69.5% of GDP, Statistics New Zealand data revealed yesterday.
SNZ's balance of payments manager Jason Attewell said the smaller net liability position 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,'' he said in a statement.
For the year to June, the country's deficit was $8.2 billion, or 3.9% of GDP, but for the year to September increased to $8.8 billion, or 4.1% of GDP.
Mr Attewell said data improvements, including spending by international visitors and students and imported goods valued at less than $1000, decreased New Zealand's average current account deficit as a percentage of GDP, from 5.6% during the past 10 years to 4.8%.
ASB chief economist Nick Tuffley said the larger than expected deficit was driven by higher than expected imports related to ''lumpy one-off items'', such as several imported helicopters and an increase in imported vehicle parts and accessories.
He had expected the annual deficit to reduce further but cautioned that by late 2014 the deficit was likely to widen gradually, as broader economic growth drove strong import demand, and also meant greater income outflows for foreign investors.
Westpac chief economist Dominick Stephens said the implication was that New Zealand economy was on stronger macroeconomic ground than was previously portrayed.
''This should be positive for the New Zealand dollar, and negative for Government bond yields; a better balance of payments position may make international investors more predisposed to lend to New Zealand entities,'' he said.
