Economic Buzz: New Zealands Q4 And Yearly Current Account Deficit Rises

New Zealands current account deficit for the year ended December 2012 was NZ $10.5 billion (5.0 percent of GDP), Statistics New Zealand said today. A current account deficit means the rest of the world earned more from New Zealand than New Zealand earned from overseas. The increase in the deficit from NZ$9.9 billion (4.7 percent of GDP) for the year ended September 2012 was mainly due to a NZ$1.3 billion fall in exports of goods and services. Exports of dairy and crude oil were both lower than for the September 2012 year, while expenditure by overseas visitors to New Zealand also fell.
In the December 2012 quarter, New Zealands current account balance, when adjusted for seasonal factors, was a deficit of NZ$2.7 billion. This compares with a deficit of NZ$2.5 billion for the previous quarter. The larger deficit this quarter was mainly due to a rise in income earned by foreign investors in New Zealand. Foreign shareholders in New Zealand companies received larger dividend payments in the latest quarter. New Zealand funded the current account deficit mainly by borrowing from overseas. Foreign investors purchased NZ$3.1 billion of government bonds this quarter. As a result of this increased borrowing, New Zealands net international liability position was NZ$150.0 billion (71.7 percent of GDP) at 31 December 2012, up NZ$2.2 billion from 30 September 2012.
Source by Commodity Insights