However, ANZ was forecasting the deficit to widen towards 6% of GDP over the next few years, largely due to the outlook for the terms of trade.
Statistics New Zealand's balance of payments figures showed New Zealand recorded a current account deficit of $1.2billion in the three months ended June, slightly smaller than expected.
In annual terms, the deficit widened to 3.5% of gross domestic product, from a revised 3.4% in March.
The historical average was 3.7%.
Mr Bagrie said together with the likes of credit now growing more than incomes, some evidence of housing savings buffers reducing, household debt to income ratios back at all-times high and the overvalued Auckland property market, more vulnerabilities were creeping into New Zealand's economic picture.
''That said, the news is certainly not all bad. When looking across some other external metrics, there is no denying the economy is in better shape than it was in the not too distant past.''
ANZ estimated the net international liability position at $149.7billion (62.2% of GDP), was the lowest as a share of GDP since the late 1990s.
Net external debt, at 57.5% of GDP, was the lowest since September 2003. The proportion of gross liabilities maturing in 90 days or less sat at a historic low of 25%.
ASB economist Nathan Penny said there were no implications from the Balance of Payments data for the GDP data due out today or the official cash rate review.
ASB expected a 0.4% increase in second-quarter GDP and expected the Reserve Bank to cut the OCR by a further 0.25% to 2.5% later this year.
One of the high points of the data yesterday was the services balance continuing to strengthen on the back of strong tourism, he said.
''Encouragingly, for the tourism sector, both arrivals and spending appear to be up, with the latter potentially benefiting from a weaker New Zealand dollar.''
The income balance was largely unchanged. Increased income earned abroad offset increased income from foreign investment in New Zealand.
