The incredible shrinking current account deficit

The incredible shrinking current account deficit

While the value of dairy exports has helped New Zealand record a current account deficit in the December 2013 quarter, $900 million less than in the September 2013 quarter, Federated Farmers knows trade agreements are a must to continue this positive trend.

“Our export performance continues to shine and while dairy is leading, it is a story of our superbly resilient primary industries,” says Bruce Wills, Federated Farmers President.

“As Westpac Institutional Bank noted, “A sharp rebound in export volumes, after the severe drought in early 2013, led to the strongest seasonally-adjusted goods balance on record.”

“The good news is that New Zealand's net international liability position in the December quarter fell to 66.6 percent of Gross Domestic Product. It puts us in the best position since 2002.

“Of course the big thing helping New Zealand is that we produce what the world wants and needs.

“We cannot do this without trading partners and trade agreements. It means the Trans Pacific Partnership would be like adding a super charger to our turbo charged ‘rock star’ economy.

“I mean New Zealand not only became the first country to sign a Free Trade Agreement with China and last year our exports surged some 25 percent. We now of course have only the sixth currency to be directly traded with the Chinese Renminbi.

“That will be a huge advantage to exporters and deepens the great relationship we have with China.

“It is why we are so keen on the Trans Pacific Partnership as it opens up massive opportunities for every New Zealander.

“We may be small in terms of people but we held in high regard for our core competitive advantage of producing food. Once they taste the New Zealand difference they see that we are a small and smart economy from aviation to information communication technology.

“Food is our foot in the world’s door and it explains why we are the land with the incredible shrinking current account deficit,” Mr Wills concluded.

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