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Record high dairy export volumes helped reduce New Zealand's current account deficit in the three months ended December but there are warning signals that the boost will not be long lasting.
The annual current account deficit fell to 4% of GDP, from 4.3% previously. The fall was in line with expectations.
Apart from the high dairy exports, increased visitor spending on account of the Rugby World Cup helped contribute towards an improvement in the services balance.
The investment income deficit was slightly smaller, owing to a drop in the outflow of earnings for foreigners from New Zealand companies.
The December seasonally adjusted deficit was $2.03 billion, down from nearly $2.8 billion in September.
ANZ-National Bank senior economist Mark Smith said the lift in dairy export volumes to a record high underpinned the lift in goods exports.
"While the lower New Zealand dollar helped hold up New Zealand dollar-denominated values, the easing goods terms of trade, recovering capital investment and a stronger dollar in 2012 will be headwinds to contend with.
"With the commodity export prices past their peak, the challenge will be sustaining a sizeable goods surplus."
The 2.5% fall in United States dollar values for the GlobalDairyTrade auction was a reminder of the potential downside for dairy, Mr Smith said.
He expressed concern about New Zealand's net international debt position which rose to $147 billion, or nearly 72% of GDP.
The $700 million increase was mild considering the quarterly account deficit and benefited from net valuation changes of $1.5 billion on New Zealand assets held abroad.
Total claims for all three Christchurch earthquakes were now estimated at $15.3 billion, $1.3 billion higher than previously estimated.
Overseas insurance companies settled $2.6 billion of reinsurance claims relating to the 2010-11 earthquakes during the December quarter.
"This is helping to push down our external debt but will reverse as claims are settled."
While revaluations and earthquake impacts helped mask the situation, New Zealand's debt levels remained high.
More progress would be needed to boost nationwide savings so that an unwelcome adjustment was not forced on the country, he said.
"Households are starting to get the message but are only about two-thirds along the journey towards lifting savings.
The onus will increasingly be placed on fiscal policy-makers to mitigate our saving and investment imbalances through an ongoing focus on restraint."
Looking ahead, Mr Smith envisaged some tension over the trajectory for New Zealand's current account deficit and external position.
Deleveraging, rebalancing the economy, a positive income shock and the rebuilding of Christchurch would invariably lead to tensions in the system.
The release valve remained the dollar.
ANZ-National expected the deficit would remain in the 4% to 5% of GDP range during this year and next before settling close to 5% of GDP in 2014.
Today's GDP release was the last major local data release for 2011.
The deficit figures suggested the domestic economy remained "scratchy", Mr Smith said.