Lower oil prices at the start of 2015 drove a decrease in New Zealand's overseas expenditure in the March 2015 quarter, Statistics New Zealand said today.
This helped New Zealand's seasonally adjusted current account deficit fall to $1.8 billion.
"Imports of petroleum products fell to their lowest value in just over nine years, as prices plummeted in the latest quarter, to their lowest level in over a decade," international statistics manager Jason Attewell said.
Quantities of petroleum product imports also fell significantly in the March 2015 quarter. Shipments of petroleum product imports can be quite volatile on a quarterly basis.
The latest quarter's $0.8 billion decrease in the seasonally adjusted current account was mainly due to a fall in imports of goods, combined with a fall in dividends paid to overseas portfolio shareholders. A current account deficit means that New Zealand's overseas expenditure exceeds our earnings.
New Zealand's annual current account deficit was $8.6 billion (3.6% of GDP) for the year ended March 2015. This compares with a deficit of $7.8 billion (3.3% of GDP) for the year ended December 2014. The larger annual current account balance was mainly due to a fall in exports of goods, which was driven by falling dairy prices over the past year.
"Increased spending by overseas visitors in New Zealand, our second-largest source of export revenue, partly offset the fall in exports of dairy products over the past year," Attewell said.
New Zealand's international liability position was $153.5 billion (64.2% of GDP) at March 31, 2015, $1.1 billion smaller than the position at December 31, 2014.
New Zealand's external debt position, which shows the difference between overseas lending and borrowing, decreased $2.0 billion to $138.9 billion (58.1% of GDP) between 31 December 2014 and 31 March 2015. An increase in reserve assets held overseas was partly offset by overseas investors purchasing debt securities issued by the banking sector in the March 2015 quarter.