Falling imports reduce current account deficit

The seasonally adjusted current account deficit was $2,682 million in the March 2009 quarter, $1,042million smaller than the December 2008 quarter deficit of $3,724 million, Statistics New Zealand said today.

The smaller deficit came mainly from a fall in imports of goods, which was partly offset by a decreasein exports of goods.

The seasonally adjusted goods balance surplus of $863 million in the March 2009 quarter was a $967million turnaround from the December 2008 quarter deficit. Seasonally adjusted goods imports fell by$1,349 million, mainly caused by a decrease in the value of imports of petroleum and petroleum products,transport equipment and passenger motor cars.

Exports of goods fell by $383 million due to lower exportprices, which more than offset an increase in the volumes of exported goods.

The seasonally adjusted services deficit narrowed by $201 million from the December 2008 quarter to theMarch 2009 quarter.

Exports of travel services increased, while imports of transportation services fell,mainly due to lower expenditure on freight, which is linked to the drop in volumes of imported goods.

The investment income deficit of $3,272 million in the March 2009 quarter was $35 million larger than theDecember 2008 quarter deficit. Foreign investors' earnings in New Zealand fell for the third consecutivequarter, but this was more than offset by a decrease in New Zealand investors' earnings from abroad.

The current account deficit for the year ended March 2009 was $15,246 million (8.5 percent of GDP),compared with $16,108 million (9.0 percent of GDP) for the year ended December 2008, and $14,211million (8.0 percent of GDP) for the year ended March 2008.

New Zealand’s current account deficit was financed by a $2.0 billion net inflow of capital in the March 2009quarter.

This net inflow of capital combined with valuation changes of financial assets and liabilities of $7.2billion, resulting in a $9.2 billion rise in New Zealand's net international debtor position from 31 December2008. Valuation changes arise from changes in exchange rates and market prices of assets and liabilities(eg shares).

At 31 March 2009, New Zealand's net international debtor position was $176.6 billion (98.2percent of GDP), compared with $167.4 billion (93.2 percent of GDP) at 31 December 2008.

Geoff Bascand
Government Statistician
25 June 2009
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See also the Hot Off The Press information release Balance of Payments and International InvestmentPosition: March 2009 quarter