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
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
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
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
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.