Global| Sep 23 2004New Zealand Current Account Deteriorates in Q2
Summary
Today, Statistics New Zealand published that nation's second quarter current account. As with South Africa yesterday, there was notable deterioration. In New Zealand, though, both trade and income balances contributed to the larger [...]
Today, Statistics New Zealand published that nation's second quarter current account. As with South Africa yesterday, there was notable deterioration. In New Zealand, though, both trade and income balances contributed to the larger deficit. At NZ$2,074 million, the current account had only the third deficit larger than NZ$2.0 billion in the 17-year history of this balance of payments compilation.
The balance on goods and services trade, often in sizable surplus, shrank to nearly zero in Q2. A surge in goods imports of 11.5% was the main force, illustrated in the first graph; the country's separate trade data indicate that, as in many other countries, "mineral fuels" imports were up sharply. At the same time, exports of goods were far from weak, with a gain of 7.3% (quarterly percent changes), extending their recovery for a third quarter.
Another major factor in New Zealand's current account is the balance on income and transfers. This deficit of $2.1 billion in Q2 is the largest ever. Foreign investment is important in New Zealand, and its expansion last year is now leading to more outflows of investment income this year, as seen in the second graph.
| Seasonally Adjusted, Million NZ$ | Q2 2004 | Q1 2004 | Q4 2003 | 2003 | 2002 | 2001 |
|---|---|---|---|---|---|---|
| Current Account Balance | -2074 | -1520 | -1225 | -5624 | -3949 | -2962 |
| Balance on Goods & Services | +30 | +267 | +161 | +842 | +2168 | +3716 |
| Exports of Goods -- %Chg | 7.3% | 5.8% | 2.9% | -7.6% | -5.4% | 11.1% |
| Imports of Goods -- %Chg | 11.5% | 3.0% | 0.7% | -1.9% | 1.8% | 4.7% |
| Balance on Income & Current Transfers | -2104 | -1786 | -1386 | -6466 | -6117 | -6677 |
Carol Stone, CBE
AuthorMore in Author Profile »Carol Stone, CBE came to Haver Analytics in 2003 following more than 35 years as a financial market economist at major Wall Street financial institutions, most especially Merrill Lynch and Nomura Securities. She has broad experience in analysis and forecasting of flow-of-funds accounts, the federal budget and Federal Reserve operations. At Nomura Securites, among other duties, she developed various indicator forecasting tools and edited a daily global publication produced in London and New York for readers in Tokyo. At Haver Analytics, Carol is a member of the Research Department, aiding database managers with research and documentation efforts, as well as posting commentary on select economic reports. In addition, she conducts Ways-of-the-World, a blog on economic issues for an Episcopal-Church-affiliated website, The Geranium Farm. During her career, Carol served as an officer of the Money Marketeers and the Downtown Economists Club. She has a PhD from NYU's Stern School of Business. She lives in Brooklyn, New York, and has a weekend home on Long Island.
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