A rise in New Zealand’s overseas expenditure combined with a fall in earnings from exports drove an increase in our seasonally adjusted current account deficit, Statistics New Zealand said today.
The annual current account balance was a deficit of $8.3 billion (3.5% of GDP) for the year ended June 2015. This compares with a revised deficit of $8.1 billion (3.4% of GDP) for the year ended March 2015. The larger current account deficit was mainly due to a combination of decreased goods exports and increased goods imports.
The increase in deficit was roughly in line with economists' expectations, though market forecasts had been based on a rise to 3.7% of GDP from a previously published 3.6% figure - prior to today's revisions by Stats NZ.
The current account balance widened to a deficit of $2.1 billion in the June 2015 quarter, compared with a deficit of $1.6 billion in the March 2015 quarter.
A combination of rising oil prices and a record volume of imported petroleum products caused a $350 million increase in the value of goods imported this quarter.
“A maintenance shutdown at the Marsden Point refinery reduced capacity to process crude oil, which meant more refined petrol and diesel needed to be imported,” international statistics senior manager Jason Attewell said.
Falls in exported forestry products and meat products brought down the total value of exported goods by $167 million compared with the March 2015 quarter.
“Both a rise in imported goods and a fall in exports of goods meant the current account deficit was $463 million larger than in the March 2015 quarter,” Attewell said. “A current account deficit means that New Zealand’s overseas expenditure exceeds our earnings.”
New Zealand’s net liability position, which measures the value of our overseas assets less our overseas liabilities, was $149.7 billion (62.2% of GDP) at 30 June 2015. This is $2.5 billion smaller than at 31 March 2015, due largely to market price changes.
New Zealand’s net external debt position – the difference between overseas lending and borrowing, increased to $138.2 billion in the June 2015 quarter (57.5% of GDP) as our overseas borrowing increased by more than our overseas lending.