By Alex Tarrant
New Zealand recorded an unadjusted current account deficit of NZ$921 million in the June quarter, which was worse than economist expectations, figures released by Statistics New Zealand show.
Economists surveyed by Bloomberg had expected an unadjusted deficit of NZ$671 million, while a Reuters poll gave an expectation of a NZ$690 million deficit. The June quarter deficit compared to a revised NZ$90 million current account surplus in the March quarter (revised from a NZ$97 million deficit).
A NZ$2.4 billion surplus in traded goods (exports minus imports) was cancelled out during the quarter by a NZ$2.5 billion net outflow of investment income, a NZ$630 million net outflow of services income, and a net NZ$163 million net outflow of current transfers, giving the NZ$921 million deficit.
In the year to the June 2011 quarter, New Zealand recorded a current account deficit of NZ$7.474 billion, or 3.7% of GDP, compared to a deficit of NZ$7.196 billion (3.6% of GDP) in the year to March 31, and a deficit of NZ$4.697 billion (2.5% of GDP) in the year to June 30, 2010.
The figures come a day ahead of Gross Domestic Product figures for the June quarter, which economists expect to show economic activity expanded 0.5% in the quarter, building on the March quarter’s 0.8% expansion.
Owe more to the world
Meanwhile at June 30, 2011, New Zealand’s international liabilities exceeded its assets by NZ$140.2 billion, or 70% of GDP, Stats NZ said. This compared to revised net international liabilities of NZ$136 billion, or 68.7% of GDP in the March quarter (revised from NZ$148.2 billion, or 75.1% of GDP).
New Zealand’s international assets included NZ$12 billion of outstanding reinsurance claims from non-residents (overseas reinsurers) for the Canterbury earthquakes. The estimate included NZ$0.7 billion of claims for the 13 June earthquake, minus NZ$0.5 billion of claims from previous earthquakes, which were settled in the June quarter, Stats NZ said.
Work carried out by Statistics New Zealand released this week saw New Zealand’s net international investment position revised for the better after Stats NZ took into account new data into its official series.
Kiwis go on holiday, fewer visitors come here
The NZ$630 million services deficit in the June 2011 quarter was down from a NZ$768 million surplus in the March quarter, and compared to a NZ$268 million deficit in the June 2010 quarter. This came as fewer overseas visitors came to New Zealand during the quarter, and as New Zealanders spent more on overseas trips, Stats NZ said.
Seasonally adjusted deficit widens
Seasonally adjusted figures released by Stats NZ showed a current account deficit of NZ$2.041 billion in the June quarter, compared to a deficit of NZ$1.534 billion in the March quarter.
The larger seasonally adjusted deficit came mainly from foreign investors’ earnings from their investments in New Zealand rising NZ$700 million as foreign-owned insurance companies began to recover from losses in the March quarter, Stats NZ said.