Falling goods exports drive rise in current account deficit

Falling goods exports drive rise in current account deficit

17 September 2014

New Zealand's seasonally adjusted current account balance was a deficit of $2.0 billion in the June 2014 quarter, Statistics New Zealand said today. This was $1.4 billion larger than the March 2014 quarter deficit.

"The value of goods exports fell over a range of commodities, with dairy the most significant contributor this quarter," international statistics manager Jason Attewell said.

A current account deficit means New Zealand's earnings from the rest of the world were less than our overseas expenditure. To fund this deficit, there was a net inflow of foreign investment into New Zealand this quarter.

New Zealand's annual current account was a deficit of $5.8 billion (2.5 percent of GDP) for the year ended June 2014. This compares with $6.0 billion (2.7 percent of GDP) for the year ended March 2014. The latest deficit is $2.1 billion smaller than that for the year ended June 2013, which was 3.7 percent of GDP.

New Zealand's net international liability position, which measures the value of our overseas assets less our overseas liabilities, was $149.7 billion (65.3 percent of GDP) at 30 June 2014. The net liability position is now $1.4 billion smaller than at 31 March 2014 due to valuation changes.

"This is the smallest net liability position as a percentage of GDP in almost 13 years," Mr Attewell said.

New Zealand's net external debt position, which measures our overseas lending less overseas borrowing, increased $2.0 billion to $142.3 billion (62.1 percent of GDP) despite an improvement in the net international liability position.

For more information about these statistics:
• Visit Balance of Payments and International Investment Position: June 2014 quarter

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