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Highest current account deficit since GFC

Posted on 14 June, 2017

Record imports for the first three months of 2017 has contributed to the largest quarterly account current deficit since 2008, Stats NZ said. A total $13.614 billion worth of goods were imported into New Zealand in the March 2017 quarter, the largest on record. “The current account balance records the value of New Zealand’s transactions with the rest of the world in goods, services, and income,” the Stats NZ report said. “When we have a current account deficit, it implies foreigners earn more from New Zealand than we earn from overseas economies.” New Zealand had a seasonally adjusted current account deficit of $2.8 billion for the March 2017 quarter, $1.1 billion wider than in December 2016 and the largest quarterly deficit since the global financial crisis rocked the economy in 2008. For the year ending March 2017, New Zealand’s annual current account deficit was $8.1 billion, or 3.1 per cent of GDP. As a percentage of GDP, this is the same as the annual deficit ending in March 2016, of $7.8 billion. "New Zealanders spent more on imports of goods this quarter than we earned from our exports of goods," said international statistics senior manager Daria Kwon. "The increased spending on goods, like cars and machinery, led to a record high value of imports this quarter." For the year ending March 2017, vehicles, parts and accessories topped the table, with imports up 11.3 per cent to 7.6 billion. In second was mechanical machinery and equipment, up 10.1 per cent to $6.8 billion, followed by business and personal travel, up 8.5 per cent to $5.7 billion.