Current account tipping in right direction

The falling current account deficit is reassuring news given the global tight market conditions, the Employers & Manufacturers Association says.

But it would be a mistake to become euphoric over the improvement as debt is still growing albeit at a slower rate than hitherto, said Alasdair Thompson, EMA’s chief executive.

“Our international debt is $167billion or 89 per cent of GDP,” Mr Thompson said.

“Though the short term debt position has improved substantially, the challenge for kiwi businesses is to look for ways to boost export earnings much more.

“The news on the balance of payments is especially welcome as it confirms that though imports came down in the March quarter, the value of our exports has been holding reasonably well despite the tight global market conditions.

“Nonetheless its ironic that the main contributor to the improvement was due to foreign owned companies earning less in New Zealand and therefore expatriating less profit.”