Fuel prices, aircraft put trade balance in deficit

New Zealand's trade balance recorded a seasonally adjusted deficit of $428 million in the three months ended March, largely due to one-off imports of large aircraft and higher fuel prices.

It was the first deficit since 2009.

The aircraft imports were part of the Air New Zealand fleet upgrade.

However, the good news was that exports continued to rise by a seasonally adjusted 3.2% in the March quarter to $11.6 billion, boosted by dairy products and crude oil.

Imports for the three months rose 8.9% from the December quarter to $12 billion, with a big jump in crude oil imports and with an aircraft being imported, Statistics New Zealand said.

For the month of March, exports were 11% ahead of a year earlier at $4.5 billion, a new monthly high, while imports rose 17% to $4.1 billion.

There was a trade surplus of $464 million, or 10% of exports, while the annual trade surplus of $631 million amounted to 1.4% of exports.

ASB economist Jane Turner said export receipts remained strong but surging fuel prices and the imports of large aircraft offset the gain from the strong commodity export performance.

"We are expecting two more Boeing 777 aeroplanes over this year, in addition to the import of a number of smaller planes. That will continue to weigh on the trade balance.

"Nonetheless, stronger commodity income will remain a key feature underpinning the New Zealand economy over the next year."

 

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