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NZ current account turns to deficit

NZ NewswireNZ Newswire 14/09/2016 Jonathan Underhill

New Zealand's current account balance turned to a deficit in the second quarter as a drop in services more than offset a pickup in exports.

The deficit was $945 million in the three months ended June 30, from a revised first-quarter surplus of $1.18 billion, Statistics New Zealand said.

The annual deficit was $7.4b, or 2.9 per cent of gross domestic product, from a revised deficit of $7.8 billion, or 3.1 per cent, in the year ended March 31.

The biggest quarter movement was in the services balance, which fell to $587 million in the latest quarter from $2.89b three months earlier, as services exports dropped to $4.8b from $6.9b.

In seasonally adjusted terms travel services exports were little changed in the second quarter at $3.48b while travel services imports rose to a record $1.4b, mainly reflecting increased spending overseas by New Zealand residents.

The goods balance rose to $875m in actual terms in the latest quarter from $592m three months earlier as goods exports rose to $13.1b from $12.1b and goods imports rose to $12.3b from $11.5b.

The financial account balance fell to $1.49b from $1.98b. New Zealand investment abroad fell to $933m from $2.8b, while foreign investment in New Zealand declined to $2.4b from $4.79b.

New Zealand's net international liability position was $163.3b, or 64.9 per cent of GDP at June 30, from $159b, or 63.9 per cent at March 31. Net external debt excluding financial derivatives and equity was $141.6b, or 56.3 per cent of GDP, up from $141b, or 56.7 per cent at March 31.

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