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Deficit grows on New Zealand current account balance in Q2

Xinhua, September 14, 2016 Adjust font size:

New Zealand's current account balance dropped further into deficit in the June quarter, driven down by record spending by New Zealanders abroad, the government statistics agency said Wednesday

The current account deficit was 1.8 billion NZ dollars (1.3 billion U.S. dollars) in the June quarter, up by 187 million NZ dollars (135.5 million U.S. dollars) from the March quarter deficit, according to Statistics New Zealand.

"More New Zealanders went overseas this quarter than in previous June quarters. And they spent the most ever recorded while travelling for work and holidays," international statistics manager Stuart Jones.

This caused services imports to increase, while services exports decreased, resulting in a fall of 144 million NZ dollars (104.34 million U.S. dollars) in the services surplus - the biggest since March 2012.

The decrease in services exports was mainly influenced by a decrease in transportation services and a slight fall in spending by international visitors to New Zealand.

The primary income deficit increased by 135 million NZ dollars (97.82 million U.S. dollars) to 2.04 billion NZ dollars (1.48 billion U.S. dollars) in the June quarter, due to an increase in income on foreign direct investment in New Zealand.

"Overall, the profits earned by foreign-owned New Zealand companies increased this quarter," Jones said.

"The majority of this income was reinvested in the June quarter, rather being than paid out as dividends as it was last quarter."

The goods balance was a deficit of 452 million NZ dollars (327.52 million U.S. dollars) in the June quarter, 71 million NZ dollars (51.48 million U.S. dollars) smaller than the March quarter deficit.

The annual current account deficit was 7.4 billion NZ dollars (5.36 billion U.S. dollars), or 2.9 percent of GDP, for the year that ended June.

This was smaller than the annual deficit of 7.8 billion NZ dollars (5.65 billion U.S. dollars), or 3.1 percent of GDP, for the year that ended March, due to a decrease in both the primary income deficit and the goods deficit. Endit