Current account deficit narrows to $2.4 billion

New Zealand’s seasonally adjusted current account deficit narrowed by $140 million to $2.4 billion in the June 2019 quarter, Stats NZ said today.

There were increases in a range of export commodities, while goods imports were little changed from last quarter. The seasonally adjusted services surplus narrowed slightly reflecting a fall in exports of services.

“With no large movements in our top exports, the smaller goods deficit was driven by a rise in other commodities including infant formula, crude oil, and aluminium,” international statistics senior manager Peter Dolan said.

Trade steady compared with GDP and GNE

The value of New Zealand’s trade in goods and services with the rest of the world has increased over time.

“We would expect to see this kind of increase, given factors like inflation and population increases,” Mr Dolan said.

However, over the last 15 years, the value of exports as a proportion of gross domestic product (GDP) ranged from 26.6 percent to 32.0 percent, while the proportion of imports to gross national expenditure (GNE) ranged from 25.9 percent to 32.2 percent.

Year ended in quarterImports as ratio of GNE (%)Exports as ratio of GDP (%)
Jun-0428.930.2
Sep-042929.8
Dec-0429.229.7
Mar-0529.329.5
Jun-0529.128.7
Sep-0529.328.6
Dec-0529.228.4
Mar-0629.328.3
Jun-0629.728.9
Sep-0630.129.5
Dec-063029.5
Mar-0729.929.6
Jun-0729.329
Sep-0728.628.3
Dec-0728.928.8
Mar-0829.229.2
Jun-0830.230.1
Sep-0831.531.1
Dec-0832.231.7
Mar-0932.232
Jun-0931.231.7
Sep-0929.430.8
Dec-0927.729.4
Mar-102728.7
Jun-102729
Sep-1027.429.2
Dec-1028.129.8
Mar-1128.630.3
Jun-1129.130.5
Sep-1129.330.5
Dec-1129.330.8
Mar-1229.330.4
Jun-1228.929.8
Sep-122929.7
Dec-1228.729
Mar-1328.428.9
Jun-1328.128.5
Sep-132828.2
Dec-1327.728.4
Mar-1427.728.8
Jun-1427.628.9
Sep-1427.328.5
Dec-1427.528.3
Mar-1527.428
Jun-1527.327.9
Sep-1527.628.3
Dec-1527.528.1
Mar-1627.227.9
Jun-162727.9
Sep-1626.427.2
Dec-162626.7
Mar-1725.926.6
Jun-1726.126.8
Sep-1726.127
Dec-1726.727.6
Mar-182727.8
Jun-1827.327.9
Sep-182828.2
Dec-1828.328.2
Mar-1928.328.3
Jun-1928.228.3

Exports are compared with GDP because both are measures of production. The ratio of exports to GDP was 28.3 percent in the year to 30 June 2019.

Imports are measured against GNE because both are measures of spending. In the year to 30 June 2019, the imports to GNE ratio was 28.2 percent.

Primary income balance steady

The primary income deficit narrowed by $32 million, or about 1 percent, in the June 2019 quarter. This is continuing the slow narrowing seen over the last two years.

The primary income balance measures how much non-residents earn on their investments in New Zealand, and the amount of income New Zealanders earn on their investments with the rest of the world. The types of investment on which income is earned varies. However, while the underlying components change, the total result is still a slight narrowing of the primary income deficit.

QuarterPrimary income balancePrimary income inflowPrimary income outflow
Jun-14-251300000018310000004344000000
Sep-14-223500000019380000004172000000
Dec-14-269500000016650000004360000000
Mar-15-233200000017750000004107000000
Jun-15-235800000021210000004479000000
Sep-15-217300000020360000004209000000
Dec-15-216800000019060000004074000000
Mar-16-177300000020450000003818000000
Jun-16-201500000020760000004091000000
Sep-16-216900000020120000004181000000
Dec-16-197100000021600000004131000000
Mar-17-258200000020270000004609000000
Jun-17-226200000024660000004727000000
Sep-17-289400000019450000004839000000
Dec-17-304200000021690000005211000000
Mar-18-275100000018480000004599000000
Jun-18-282200000023110000005133000000
Sep-18-264400000024300000005075000000
Dec-18-270900000023460000005055000000
Mar-19-238300000024150000004798000000
Jun-19-235100000025050000004855000000

/Stats NZ Public Release. View in full here.